UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 5, 1997 (May 16, 1997)
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Date of Report (Date of earliest event reported)
PANAMSAT CORPORATION
PANAMSAT INTERNATIONAL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-22531 95-4607698
Delaware 0-26712 06-1407851
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Pickwick Plaza, Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 622-6664
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<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of the Registrant.
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On May 16, 1997, Hughes Communications, Inc. ("HCI") and PanAmSat
International Systems, Inc. (formerly known as PanAmSat Corporation, "Old
PanAmSat") combined their satellite operations pursuant to an Agreement and Plan
of Reorganization, dated as of September 20, 1996, as amended as of April 4,
1997 (the "Reorganization Agreement"), between HCI and certain of its
subsidiaries and Old PanAmSat (the "Merger"). The Merger was consummated through
the merger of a wholly owned subsidiary of a newly formed holding company (such
holding company, "New PanAmSat"), with and into Old PanAmSat and a contribution
of the satellite services business of HCI to New PanAmSat, with the result that
Old PanAmSat became a wholly owned subsidiary of New PanAmSat and New PanAmSat
became the owner and operator of the HCI satellite services business. Following
the Merger, Old PanAmSat was renamed PanAmSat International Systems, Inc. and
New PanAmSat was renamed PanAmSat Corporation. Upon consummation of the Merger,
each direct or indirect holder of each outstanding share of stock, par value
$0.01 per share, of Old PanAmSat received, at such holder's election (the
"Elections"), (i) one share of common stock, par value $0.01 per share of New
PanAmSat ("New PanAmSat Common Stock"), (ii) $15 in cash plus one-half share of
New PanAmSat Common Stock or (iii) $30 in cash, subject to proration. As a
result of the Elections and in accordance with the Reorganization Agreement and
the Stock Contribution and Exchange Agreement dated as of September 20, 1996
(the "Univisa Contribution Agreement") among Grupo Televisa, S.A. a Mexican
corporation ("Televisa"), Satellite Company, LLC, a Nevada limited liability
company ("S Company"), New PanAmSat and HCI, Elections to receive $30 in cash
were prorated, resulting in each such Election receiving approximately $16.38 in
cash and 0.45 shares of New PanAmSat Common Stock in exchange for each share of
common stock of Old PanAmSat.
In exchange for the contribution of the existing satellite services
business of HCI and certain of its subsidiaries, HCI received 106,622,807 shares
of New PanAmSat Common Stock, an amount equal to 71.5% of New PanAmSat's issued
and outstanding Common Stock. Prior to the Merger, Old PanAmSat had been
controlled by the former holders of Old PanAmSat's Class A Common Stock, subject
to certain veto rights of the former holder of Old PanAmSat's Class B Common
Stock. For a discussion of arrangements and understandings among members of the
former controlling stockholders of Old PanAmSat and the new controlling
stockholder of New PanAmSat with respect to the election of directors and other
matters, reference is made to the Amended and Restated Stockholder Agreement,
dated as of May 16, 1997, by and among Magellan International, Inc., HCI, S
Company and the former holders of Class A Common Stock of Old PanAmSat, which is
filed herewith and is incorporated herein by reference.
Pursuant to an Assurance Agreement dated September 20, 1996, among
Hughes Electronics, a Delaware Corporation ("HE"), Old PanAmSat, New PanAmSat
and S Company, HE agreed to lend up to $1.725 billion to New PanAmSat on the
closing date of the Merger. HE borrowed from General Motors the funds necessary
to provide the new financing and such funds were loaned to New PanAmSat by an
affiliate of HE, Hughes Network Systems Inc., pursuant to a loan agreement (the
"Loan Agreement"). The Loan Agreement provides for a three year term loan
bearing interest at a rate of 2% above the London Interbank Offering Rate (which
interest rate is subject to renegotiation if New PanAmSat attains an investment
grade credit rating or Old PanAmSat ceases to be subject to restrictions (a) on
making restricted payments and (b) on pledging its assets contained in the
indentures governing Old PanAmSat's existing indebtedness and the certificate of
designation for Old PanAmSat's Preferred Stock). New PanAmSat is required to pay
seven quarterly installments of $50 million each commencing August 1, 1998, with
the balance of the loans payable on May 1, 2000. Under the Loan Agreement, New
PanAmSat is required to make certain prepayments of principal upon the
occurrence of certain events, including (i) the issuance of equity, (ii) the
issuance or incurrence of debt evidenced as a new borrowing in excess of
$5,000,000, (iii) the sale of assets with a fair market value in excess of
$10,000,000 of New PanAmSat or its material subsidiaries, if the proceeds
therefrom are not reinvested in New PanAmSat or its material subsidiaries within
180 days and (iv) the receipt of insurance proceeds in excess of $5,000,000, if
such proceeds are not reinvested in New PanAmSat or its material subsidiaries.
The Loan Agreement contains covenants that prohibit or limit, among other
things, pledges of
Page 2 of 7
<PAGE>
New PanAmSat's assets and the incurrence of certain indebtedness and requires
that New PanAmSat and its subsidiaries maintain a certain consolidated net
worth. New PanAmSat's obligations under the Loan Agreement are guaranteed by
Hughes Communications Services, Inc., Hughes Communications Japan, Inc., and
Hughes Communications Carrier Services, Inc., subsidiaries of New PanAmSat. All
obligations of New PanAmSat and its subsidiaries under the Loan Agreement are
subject to restrictions imposed on them under the indentures governing Old
PanAmSat's existing indebtedness and the certificate of designation for Old
PanAmSat's preferred stock; additionally, neither New PanAmSat nor any of its
subsidiaries are prohibited under the Loan Agreement from taking any action
thereunder which it is permitted to take under such indentures or certificate of
designation.
Immediately prior to the Merger, in a separate but related transaction
(the "Univisa Contribution") and pursuant to the Univisa Contribution Agreement,
New PanAmSat acquired from S Company all of the capital stock of PanAmSat
International Holdings, Inc. (formerly known as Univisa, Inc.), a Delaware
corporation, which is the indirect holder of all of the outstanding Old PanAmSat
Class B Common Stock. As consideration for the Univisa Contribution, S Company
received for its shares of Old PanAmSat Class B Common Stock, $611,501,153 in
cash and 6,239,594 shares of New PanAmSat Common Stock, following the Share
Repurchase and the DTH Sale (as defined below). Concurrently with the Merger and
immediately following the Univisa Contribution, 7.5 million shares of New
PanAmSat Common Stock received by S Company in connection with the Univisa
Contribution were repurchased by New PanAmSat for $225 million (the "Share
Repurchase"). Following the Share Repurchase, DTH, LLC, a Delaware limited
liability company and designee of Televisa, purchased for $225 million all of
Old PanAmSat's rights to purchase from Televisa equity interests in certain
joint ventures to be formed to offer direct-to-home services in Latin America
and the Iberian Peninsula, pursuant to the DTH Option Purchase Agreement dated
as of September 20, 1996 between Old PanAmSat, Televisa and S Company (the "DTH
Sale").
The total amount of funds paid by New PanAmSat as consideration in the
Merger and the Univisa Contribution Agreement was approximately $1.725 billion,
including (i) approximately $1.5 billion paid to the former holders of Old
PanAmSat's Class A Common Stock, Old PanAmSat's Ordinary Common Stock and
options to acquire Old PanAmSat's Ordinary Common Stock and the former
beneficial holder of Old PanAmSat's Class B Common Stock, and (ii) $225 million,
to fund the Share Repurchase.
Item 2. Acquisition or Disposition of Assets.
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As disclosed above, New PanAmSat acquired Old PanAmSat as a result of
the Merger. See Item 1.
Page 3 of 7
<PAGE>
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Business Acquired.
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The Financial statements of PanAmSat International Systems,
Inc. required by this Item 7(a) are incorporated herein by
reference to (i) the audited financial statements of PanAmSat
International Systems, Inc. ("PISI") as of December 31, 1994,
1995 and 1996 contained in pages FIN-1 through FIN-19 of
PISI's Proxy Statement filed with the Securities and Exchange
Commission on April 18, 1997, under the name PanAmSat
Corporation; and (ii) the unaudited financial statements of
PISI contained in the Quarterly Report filed by PISI
electronically on Form 10-Q/A for the quarter ended March 31,
1997, with the Securities and Exchange Commission under the
name PanAmSat Corporation on May 9, 1997.
(b) Pro Forma Financial Information.
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It is impracticable for PanAmSat Corporation to provide the
required pro forma financial information at this time.
PanAmSat Corporation will file the required pro forma
financial information as an amendment to this Form 8-K as soon
as practicable, and no later than 60 days after the due date
of this Form 8-K.
(c) Exhibits.
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2.1 Agreement and Plan of Reorganization dated as of
September 20, 1996, by and among Hughes
Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International,
Inc., and PanAmSat Corporation.*
2.2 Amendment to Agreement and Plan of Reorganization
dated as of April 4, 1997, by and among Hughes
Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International,
Inc. and PanAmSat Corporation.*
2.3 Stock Contribution and Exchange Agreement, dated
September 20, 1996, among Grupo Televisa, S.A.,
Satellite Company, LLC, Magellan International,
Inc. and Hughes Communications Inc.*
2.4 Assurance Agreement, dated September 20, 1996,
between Hughes Electronics Corporation, PanAmSat
Corporation, Satellite Company, LLC and Magellan
International, Inc.*
4.1 Amended and Restated Stockholder Agreement, dated as
of May 16, 1997, by and among Magellan International,
Inc., Hughes Communications, Inc., Satellite Company,
LLC and the former holders of Class A Common Stock of
PanAmSat International Systems, Inc.**
4.2 Amended and Restated Registration Rights Agreement,
dated as of May 16, 1997, by and among Magellan
International, Inc., Hughes Communications, Inc.,
Hughes Communications Galaxy, Inc., Hughes
Communications Satellite Services, Inc., Satellite
Company, LLC and the former holders of Class A Common
Stock of PanAmSat International Systems, Inc.**
4.3 Loan Agreement, dated May 15 1997, between Hughes
Network Systems, Inc. and Magellan International,
Inc.**
Page 4 of 7
<PAGE>
10 DTH Option Purchase Agreement, dated September 20,
1996, between PanAmSat Corporation, Grupo Televisa,
S.A. and Satellite Company, LLC.***
20 Press Release of PanAmSat Corporation dated May 16,
1997.**
23 Consent of Arthur Andersen LLP.**
99(a) Audited Financial Statements of PanAmSat
International Systems, Inc. set forth in Magellan
International, Inc.'s Form S-4 Registration Statement
for the years ended December 31, 1994, 1995 and
1996.*
99(b) Unaudited Financial Statement of PanAmSat
International Systems, Inc. set forth in PanAmSat
Corporation's Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 1997.****
*Filed with the Securities and Exchange Commission as an exhibit to
Magellan International, Inc.'s Form S-4 Registration Statement (No.
333-25293) on April 16, 1997 and incorporated herein by reference.
**Filed herewith.
***Filed with the Securities and Exchange Commission as an exhibit to
PanAmSat Corporation's Form 10-Q for the quarter ended September
30, 1996 and incorporated herein by reference.
****Filed with the Securities and Exchange Commission as the financial
statement for PanAmSat Corporation's Form 10-Q/A for the quarter
ended March 31, 1997, and incorporated herein by reference.
Page 5 of 7
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, each of PanAmSat International Systems, Inc. and PanAmSat Corporation
have duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
PANAMSAT INTERNATIONAL SYSTEMS, INC.
By: /s/ James W. Cuminale
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Name: James W. Cuminale
Title: Senior Vice President and
General Counsel
PANAMSAT CORPORATION
By: /s/ James W. Cuminale
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Name: James W. Cuminale
Title: Senior Vice President and
General Counsel
Date: June 5, 1997
Page 6 of 7
<PAGE>
EXHIBIT INDEX
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Exhibit
No.
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2.1 Agreement and Plan of Reorganization dated as of September 20,
1996, by and among Hughes Communications, Inc., Hughes
Communications Galaxy, Inc., Hughes Communications Satellite
Services, Inc., Hughes Communications Services, Inc., Hughes
Communications Carrier Services, Inc., Hughes Communications
Japan, Inc., Magellan International, Inc. and PanAmSat
Corporation.*
2.2 Amendment to Agreement and Plan of Reorganization dated as of
April 4, 1997, by and among Hughes Communications, Inc.,
Hughes Communications Galaxy, Inc., Hughes Communications
Satellite Services, Inc., Hughes Communications Services,
Inc., Hughes Communications Carrier Services, Inc., Hughes
Communications Japan, Inc., Magellan International, Inc. and
PanAmSat Corporation.*
2.3 Stock Contribution and Exchange Agreement, dated September 20,
1996, among Grupo Televisa, S.A., Satellite Company, LLC,
Magellan International, Inc. and Hughes Communications, Inc.*
2.4 Assurance Agreement, dated September 20, 1996, between Hughes
Electronics Corporation, PanAmSat Corporation, Satellite
Company, LLC and Magellan International, Inc.*
4.1 Amended and Restated Stockholder Agreement, dated as of May
16, 1997, by and among Magellan International, Inc., Hughes
Communications, Inc., Satellite Company, LLC and the former
holders of Class A Common Stock of PanAmSat International
Systems, Inc.**
4.2 Amended and Restated Registration Rights Agreement, dated as
of May 16, 1997, by and among Magellan International, Inc.,
Hughes Communications, Inc., Hughes Communications Galaxy,
Inc., Hughes Communications Satellite Services, Inc.,
Satellite Company, LLC and the former holders of Class A
Common Stock of PanAmSat International Systems, Inc.**
4.3 Loan Agreement, dated May 15 1997, between Hughes Network
Systems, Inc. and Magellan International, Inc.**
10 DTH Option Purchase Agreement, dated September 20, 1996,
between PanAmSat Corporation, Grupo Televisa, S.A. and
Satellite Company, LLC.***
20 Press Release of PanAmSat Corporation dated May 16, 1997.**
23 Consent of Arthur Andersen LLP.**
99(a) Audited Financial Statements of PanAmSat International
Systems, Inc. set forth in Magellan International Inc.'s Form
S-4 Registration Statement for the years ended December 31,
1994, 1995 and 1996.*
99(b) Unaudited Financial Statement of PanAmSat International
Systems, Inc. set forth in PanAmSat Corporation's Quarterly
Report on Form 10-Q/A for the quarter ended March 31, 1997.***
*Filed with the Securities and Exchange Commission as an exhibit to Magellan
International, Inc.'s Form S-4 Registration Statement (No. 333-25293) on
April 16, 1997 and incorporated herein by reference.
**Filed herewith.
***Filed with the Securities and Exchange Commission as an exhibit to PanAmSat
Corporation's Form 10-Q for the quarter ended September 30, 1996 and
incorporated herein by reference.
****Filed with the Securities and Exchange Commission as the financial
statement for PanAmSat Corporation's Form 10-Q/A for the quarter ended
March 31, 1997, and incorporated herein by reference.
Page 7 of 7
EXHIBIT 4.1
AMENDED AND RESTATED STOCKHOLDER AGREEMENT
This AMENDED AND RESTATED STOCKHOLDER AGREEMENT (this "Agreement"),
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dated as of May 16, 1997, is entered into by and among MAGELLAN INTERNATIONAL,
INC., a Delaware corporation ("Holding Company" or the "Company"), HUGHES
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COMMUNICATIONS, INC., a California corporation ("HCI"), the Class A Holders
listed on the signature page hereof (the "Class A Holders"), and SATELLITE
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COMPANY, L.L.C., a Nevada limited liability company ("S Company").
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RECITALS
A. Pursuant to that certain Agreement and Plan of Reorganization by
and among Panamsat Corporation, HCI and Hughes Communications Galaxy, Inc. and
certain other subsidiaries of HCI (as such agreement may be hereafter amended
from time to time, the "Reorganization Agreement"), HCI has organized Holding
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Company to acquire the Galaxy Business (as defined in the Reorganization
Agreement) and cause a subsidiary of Holding Company to merge with and into
Panamsat Corporation in each case upon the terms and conditions set forth in the
Reorganization Agreement.
B. Pursuant to that certain Stock Contribution and Exchange Agreement
by and among HCI, Hughes Communications Galaxy, Inc., S Company and Grupo
Televisa, S.A. (as such agreement may be hereafter amended from time to time,
the "Univisa Contribution Agreement"), HCI and Hughes Communications Galaxy,
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Inc. have agreed to cause Holding Company to acquire from S Company all of the
outstanding shares of capital stock of Univisa, Inc., a Delaware corporation
which indirectly owns all of the shares of Class B Common Stock, par value $.01
per share, of Panamsat Corporation.
C. Pursuant to the Reorganization Agreement and the Univisa
Contribution Agreement, Panamsat Corporation will become a subsidiary of Holding
Company and Holding Company will acquire the Galaxy Business, and HCI, the Class
A Holders and S Company will become stockholders of Holding Company.
D. The parties desire to enter into this Agreement to regulate certain
aspects of their relationships with regard to each other and Holding Company.
AGREEMENT
In consideration of the foregoing and the mutual promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound thereby, agree as follows:
1. Certain Defined Terms. Capitalized terms used and not defined
---------------------
herein have the respective meanings ascribed to them in the Reorganization
Agreement. For purposes of this Agreement:
<PAGE>
"Affiliate" means with respect to any person or entity (i) any other
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person or entity directly or indirectly controlling or controlled by or under
direct or indirect common control with that person or entity, (ii) any spouse,
immediate family member or other relative who has the same principal residence
of any person (in the case of an individual), (iii) any trust in which any
person or entity has a beneficial interest and (iv) any corporation or other
organization of which any such persons or entities described in clause (i) or
(ii) above collectively own more than 50% of the equity of such entity.
"Closed Periods" means the total of (a) the number of days prior to
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Closing during which PanAmSat Corporation Common Stock could not be sold as a
result of notices given by HCI pursuant to the last sentence of Section 3(a) of
the Principal Stockholders Agreement, and (b) any Delay Periods, Hold Back
Periods or Interruption Periods (each as defined in the Registration Rights
Agreement) which occur after the Commencement Date (as defined in Section
2(b)(i)) and result in a delay or suspension of a Demand Registration or a
Piggyback Registration (as defined in the Registration Rights Agreement) by the
Minority Stockholders or their Permitted Transferees.
"Ending Date" means the date when restrictions on the ability of HCI
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and its Affiliates to sell or transfer Shares under Section 2(b) end. That date
shall be the earliest of (a) a Termination Event or (b) twelve (12) months after
the Commencement Date plus Closed Periods, if any.
"Exempt Transfer" means any transfer of Shares by HCI or its
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Affiliates to any of its or their Affiliates (other than the Company or any of
its Subsidiaries).
"Holding Company Common Stock" means the common stock, $.01 par value,
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of Holding Company.
"HCI Sale" means any sale, exchange or other disposition by HCI or its
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Affiliates of Shares, other than an Exempt Transfer or a sale of Shares pursuant
to a registration statement under the Securities Act, which at the time of
determination represent more than 5% of the outstanding Holding Company Common
Stock. "HCI Sale" shall not include, in the case of Holding Company or any of
its Subsidiaries, any sale of Holding Company Common Stock. Nothing in this
Agreement shall limit any rights the Stockholders may have to participate in any
such offering under the Registration Rights Agreements, nor shall the definition
"HCI Sale" limit the restrictions contained in Section 2(b) in any way.
"HCI Total Sale" means, as of any date of determination, the sale,
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exchange or other disposition by HCI and each of its Affiliates other than in an
Exempt Transfer of 100% of their Shares.
"Low Ownership Event" means, as of any date of determination, any
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sale, exchange or other disposition of Shares by the Minority Stockholders which
causes the Minority Stockholders to beneficially own, in the aggregate, less
than the Requisite Level.
"Minority Stockholders" means, each of the Class A Holders, S Company
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and their respective Permitted Transferees, which collectively shall be the
"Minority Stockholders".
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2
<PAGE>
"Permitted Transfers" means a sale, transfer or assignment or other
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disposition to a Permitted Transferee.
"Permitted Transferees" means, as to HCI, any transferee in an Exempt
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Transfer or any Permitted Transferee; as to S Company, Grupo Televisa, S.A., any
controlled Affiliate of Grupo Televisa, S.A., or any Permitted Transferee; as to
the Class A Holders, (A) any other Class A Holder, (B) any person who is the
spouse or former spouse of, or any lineal descendent of, or any spouse of such
lineal descendant of, or the grandparent, parent, brother or sister of, or
spouse of such brother or sister of, a Class A Holder or Permitted Transferee of
such person; (C) upon the death of any Class A Holder or any Permitted
Transferee of such person, the executors of the estate of such Class A Holder or
Permitted Transferee, any of such Class A Holder's or such Permitted
Transferee's heirs, testamentary trustees, devisees, or legatees; (D) any trust
principally for the benefit of one or more of the foregoing Class A Holders or
Permitted Transferees; (E) upon the disability of any Class A Holder or
Permitted Transferee, any guardian or conservator of such Class A Holder or
Permitted Transferee; or (F) any corporation, partnership or other entity if all
of the beneficial ownership is held by Class A Holders or any Permitted
Transferees; and as to any Stockholders, any person to whom a transfer may be
made pursuant to the provisions of Section 8(e); provided that in each of the
foregoing cases such transferee assumes and agrees to perform and becomes a
party to this Agreement.
"Registration Rights Agreement" means the agreement of that name of
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even date among the parties.
"Requisite Level" means 5% or more of the number of shares of Holding
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Company Common Stock outstanding immediately after the consummation of the
transactions contemplated by the Reorganization Agreement and the Univisa
Contribution Agreement and prior to any further issuances for refinancing or
other purposes, as such total number is adjusted to reflect stock splits,
combinations, stock dividends, recapitalizations, reclassifications, and similar
transactions.
"Shares" means the shares of Holding Company Common Stock owned by the
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Stockholders at the time of determination.
"Stockholders" means, collectively, HCI, and its Affiliates who
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own Shares, the Class A Holders, S Company, and their respective Permitted
Transferees, each of which shall individually be a "Stockholder".
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"Termination Event" means a Low Ownership Event or an HCI Total Sale.
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3
<PAGE>
2. Certain Restrictions on the Purchase and Sale of Shares.
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(a) Take-Along Right. HCI on behalf of itself and its Affiliates
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hereby agrees:
(i) With respect to any proposed HCI Sale, each Minority Stockholder
(each a "Take-Along Stockholder"), shall have the right (the "Take-Along Right")
---------------------- ----------------
to join in such sale and to sell a number of whole Shares equal to the number
derived by multiplying the total number of Shares proposed to be transferred by
a fraction, the numerator of which is the total number of Shares owned by such
Take-Along Stockholder and the denominator of which is the total number of
Shares owned by HCI and its Affiliates and all Take-Along Stockholders proposing
to so join.
(ii) Any Shares purchased from Take-Along Stockholders pursuant to
this Section 2(a) shall be paid for at the same price per Share and (to the
extent applicable) upon the same terms and conditions as such proposed transfer
by HCI and its Affiliates.
(iii) HCI shall (on its own behalf and on behalf of any of its
Affiliates effecting an HCI Sale), not less than 30 days prior to such proposed
HCI Sale, notify each Take-Along Stockholder in writing of such HCI Sale (the
"Sale Notice"). Such notice shall: (A) state the number of Shares proposed to
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be transferred, (B) identify the proposed purchaser(s), (C) state the proposed
amount and form of consideration and terms and conditions of payment, and (D)
confirm that each proposed purchaser has been informed of the Take-Along Right
provided for in this Section 2(a) and has agreed to purchase Shares in
accordance with the terms thereof.
(iv) The Take-Along Right may be exercised by any Take-Along
Stockholder by delivery of a written notice to HCI proposing to sell Shares (the
"Take-Along Notice") within 30 days following the Sale Notice, which Take-Along
-----------------
Notice shall state the amount of Shares that such Take-Along Stockholder
proposes to include in such transfer. If no Take-Along Notice is received during
such 30-day period, HCI and its Affiliates shall have the right, for a 30-day
period after the expiration of such 30-day period, to transfer the Shares
specified in the Sale Notice on terms and conditions no more favorable than
those stated in such notice.
(v) In the event that a purchaser refuses to purchase Shares from the
Take-Along Stockholders on the same terms and conditions as specified in the
Sale Notice, then HCI and its Affiliates shall not sell any Shares to that
purchaser in the HCI Sale.
(b) Certain Sale Restrictions.
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(i) Neither HCI nor its Affiliates may, directly or indirectly, issue,
sell, exchange or otherwise dispose of, or offer or agree, directly or
indirectly, to issue, sell, exchange or otherwise dispose (including through
purchase by the Company or any of its Affiliates) of Shares or common equity of
the Company or any of its Subsidiaries, or any interest therein, or securities
convertible into or exercisable or exchangeable for Shares or such common equity
interests, or offer or enter into any contract, option or other arrangement or
understanding
4
<PAGE>
to effect any such transactions, during the period (A) beginning on the Closing
and (B) ending on the Ending Date, provided, however, that restrictions on sales
by the Company shall not commence (the "Commencement Date") until the earlier of
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(x) the first anniversary of the Closing (eighteen months following the Closing
in the event the Minority Stockholders or their Affiliates sell more than five
million Panamsat Shares (other than to Permitted Transferees) between the date
of the Reorganization Agreement and the Closing) and (y) the date the Company
shall notify the Minority Stockholders that it has completed the refinancing of
up to $1.725 billion of indebtedness incurred by the Company in connection with
the transactions contemplated by the Reorganization Agreement and the Univisa
Contribution Agreement (it being agreed that the exemption from the restriction
on sales by the Company pursuant to this clause shall only apply to sales, the
net proceeds of which are entirely used to refinance such indebtedness); and
provided further that the foregoing restrictions shall not apply to reasonable
issuances by the Company for employee plans, in acquisitions from non-
Affiliates, pursuant to a dividend reinvestment plan, or upon exercise or
conversion of previously issued options, warrants or convertible securities.
(ii) Each of the Minority Stockholders agrees severally and not
jointly and solely with respect to itself and the Shares owned beneficially or
of record by it, not to offer, sell or transfer the Shares, or any interest
therein, or securities convertible into Shares, or offer or enter into any
contract, option or other arrangement or understanding to effect any sale or
transfer of Shares or interests therein or securities convertible into or
exercisable or exchangeable for Shares, to any person that is not a Permitted
Transferee, after the Closing and prior to the Commencement Date.
Notwithstanding the foregoing, Minority Stockholders may offer and sell or
transfer Shares, or interests therein, or securities convertible into or
exercisable or exchangeable for Shares, to persons other than Permitted
Transferees in private transactions with the consent of HCI, which consent will
be granted if, in HCI's reasonable judgment, such transfer will not materially
and adversely affect Holding Company's financing plans or on the price of or
demand for Holding Company Common Stock, and the purchaser provides assurances
satisfactory to HCI that it will not prior to the Commencement Date sell any of
such Shares at a time or with an effect which may materially and adversely
affect such financing plans of Holding Company or the price of or demand for
Holding Company Common Stock. Further notwithstanding the foregoing, the
Minority Stockholders may pledge their Shares as collateral for a bona fide
loan, provided that the lender, on terms reasonably acceptable to HCI and the
Company, agrees that upon liquidation of such collateral the lender or any
transferee will assume and agree to perform this Agreement or, if requested by
HCI or the Company, waive all rights under this Agreement.
(c) Standstill Right. HCI agrees that HCI and its Affiliates shall
----------------
not acquire or come to hold beneficially or otherwise, whether by purchase,
exchange or otherwise, more than 81% of the outstanding common equity interests
in Holding Company, except (i) pursuant to a merger which is approved by the
holders of a majority of the shares of Holding Company Common Stock not owned by
HCI and its Affiliates, (ii) pursuant to a tender offer recommended by a
majority of the Disinterested Directors of the Holding Company and second-step
merger which offers the same per share consideration to all holders of Holding
Company Common Stock and in which more than half the outstanding Holding Company
Common Stock not owned by HCI and its Affiliates at the inception of the
transaction is either tendered or voted in favor of the transaction, and (iii)
except pursuant to such other transaction as shall provide
5
<PAGE>
for parity of treatment of holders of Holding Company Common Stock and is
approved by the holders of a majority of the shares of Holding Company Common
Stock not owned by HCI and its Affiliates and by a majority of the Disinterested
Directors of Holding Company.
3. Governance and Business Operations.
----------------------------------
(a) Board of Directors. The Stockholders, on behalf of themselves and
------------------
their Affiliates and Permitted Transferees, hereby agree to take all necessary
action (including, without limitation, voting the Common Stock of the Company
beneficially owned by them, calling special meetings of stockholders of the
Company and executing and delivering written consents) such that the Board of
Directors of the Company shall consist of ten (10) members designated as herein
provided. HCI shall designate all members of the Board of Directors not
designated by the Minority Stockholders. For so long as Mr. Frederick A. Landman
is Chief Executive Office of the Company, he shall be one of HCI's designees.
The Minority Stockholders shall be entitled to initially designate two (2)
directors of the Company, one (1) of whom may be designated by the Class A
Holders and one (1) of whom may be designated by S Company. For so long as the
Class A Holders and their Permitted Transferees, as a group (the "A Group"),
-------
beneficially own a number of Shares which is greater than the number of shares
comprising 4% of the outstanding Common Stock of the Company immediately after
the consummation of the transactions contemplated by the Reorganization
Agreement and the Univisa Contribution Agreement and prior to any further
issuances for refinancing or other purposes (as such Shares may be adjusted to
reflect stock splits, combinations, stock dividends, recapitalizations,
reclassifications, and similar transactions, the "Director Minimum Shares"), at
------------------------
each subsequent meeting of stockholders of the Company (or action by consent in
lieu thereof), the A Group shall be entitled to designate one director, to be
selected by a majority vote of the Shares beneficially owned by the A Group. For
so long as S Company and its Permitted Transferees, as a group (the "B Group"),
-------
beneficially own a number of Shares greater than the Director Minimum Shares, at
each subsequent meeting of stockholders of the Company (or action by consent in
lieu thereof), the B Group shall be entitled to designate one director, to be
selected by a majority vote of the Shares beneficially owned by the B Group. Any
vacancy of an available A Group or B Group director position will be filled
promptly without holding a meeting of stockholder's of the Company at the
request of the A Group or B Group, as applicable, with their designee; provided
that the A Group or B Group, as applicable, shall beneficially own a number of
shares greater than the Director Minimum Shares at the time of filling such
vacancy.
(b) Transactions with Affiliates. HCI and its Affiliates (other than
----------------------------
the Company and its Subsidiaries) shall not propose or approve any loan, advance
or guarantee to, from, or for the benefit of, or sell, lease, transfer or
otherwise dispose of any of their properties or assets to, or for the benefit
of, or purchase or lease any property or assets from, or enter into or amend any
contract, agreement or understanding with, Holding Company or any Subsidiary of
Holding Company, except on terms that are no less favorable to Holding Company
or such Subsidiary than those (including, without limitation, prices) ordinarily
entered into in comparable transactions by HCI or the relevant Affiliate on an
arms' length basis with an unrelated party. All material transactions (and all
other transactions which the Chief Executive Officer of the Holding Company may
designate) between HCI and its Affiliates on the one hand, and Holding Company
or its Subsidiaries on the other, shall be reviewed by a committee comprised of
6
<PAGE>
Disinterested Directors, and approval of such transactions by such committee
shall be conclusive evidence of compliance with the provisions of this Section
3(b). Upon such approval, unless required by such directors after due
consideration, Holding Company or such Subsidiaries may enter into and perform
the approved transactions with HCI and its Affiliates without competitive
bidding or other special procedures.
(c) HE Covenant Not to Compete. HCI agrees:
--------------------------
(i) Until the fifth anniversary after the Closing Date, HE and any
entity owned 50% or more by HE (excluding Holding Company and its Subsidiaries)
(the "Committing Companies") shall not compete with Holding Company or any of
--------------------
its Subsidiaries after the Closing in the "Galaxy Business" (as defined below)
in any geographic area except as allowed under subsection (iii) below.
(ii) As used herein, the "Galaxy Business" shall mean: (A) the sale
---------------
or lease of, or the provision of satellite services via, transponder capacity on
satellites operating in geostationary earth orbit in the C-band, Ka-band and Ku-
band frequencies for the transmission of video, audio and data signals; and (B)
the provision of telemetry, tracking and control services for such satellites
and for other satellites operating in geostationary earth orbit in the C-band,
Ka-band, Ku-band, L-band and UHF-band frequencies or other frequency bands that
may be utilized in the future; but in each case excluding the sale or lease of
transponder capacity and telemetry, tracking and control services provided on or
for any satellite that has both (x) multiple (six or more) receive and transmit
beams and (y) an on-board satellite payload processor which can switch uplink
signals in one beam to a downlink signal in one of multiple beams.
(iii) The Committing Companies shall not be restricted from conducting
any business that falls within the following categories (the "Exclusivity
-----------
Exceptions"):
- -----------
(A) All aspects of the direct-to-home satellite business, whether done
through Galaxy Latin America, DIRECTV International, Inc., DIRECTV USA or any
other entity owned 50% or more by HE including, but not limited to, (x) the
provision of services directly to consumers via satellite; (y) the sale or lease
of transponders or channels therein to third parties engaging in the direct-to-
home satellite business in which any of the Committed Companies is involved
(whether by ownership of an interest in a satellite or any part of the capacity
thereof or in any related or associated business), whether in the FSS or BSS
bands; and (z) the provision of programming to cable head ends, which in each of
cases (y) and (z) is ancillary to any direct-to-home satellite business in which
the Committing Companies have an interest; provided that if there is excess
capacity available on a satellite used primarily in the direct-to-home satellite
business, the sale or lease of such excess capacity shall not be precluded by
the foregoing restriction;
(B) All aspects of value added services, i.e., the sale of business
services which include the provision of transponder capacity that is ancillary
to the provision of such services by the Committing Companies including, but not
limited to, shared hub VSAT business or DIRECPC or distance learning or any
similar type of services that may now or in the future be provided or developed
by HE or any of its Affiliates (other than Holding Company and its
Subsidiaries);
7
<PAGE>
(C) All aspects of the business of providing satellite or transponder
capacity or portions thereof of any type or kind to the United States
government, or any department or agency thereof;
(D) The provision by the Committing Companies of project financing, or
the acceptance by any of them of a minority equity position in any other
satellite operating or service company, as part of a satellite sale;
(E) All aspects of the business of manufacturing and selling or
leasing satellites in their entirety, other than the sale or lease of individual
transponders or portions thereof (except with respect to such sale or lease of
transponders as otherwise provided for in this Section (iii)); and
(F) As part of the acquisition of a third party where the competing
business is not a substantial part of such acquired business provided that such
competing business shall be disposed of in a commercially reasonable manner as
soon as commercially reasonable after such acquisition.
(iv) The parties acknowledge that the Galaxy Business does not
include, and the Committing Companies are retaining, the following: all aspects
of the business of providing mobile satellite services and all aspects of the
satellite-based business commonly referred to by HE as the "Spaceway" business.
(d) Holding Company's Covenant Not to Compete. Holding Company and
-----------------------------------------
its controlled Affiliates shall not engage in any aspect of the direct broadcast
satellite business other than through the sale or lease of transponders or
channels therein or the provision of transponder services and the provision of
other value added services ancillary thereto to third parties engaged in the
direct broadcast satellite business, provided that Holding Company and its
Subsidiaries shall not be precluded from providing project financing to such
third parties or the acceptance of a minority equity position in a third party
in connection with the sale or lease of transponders or channels therein or the
provision of transponder services. For so long as Grupo Televisa, S.A. and its
controlled Affiliates own any Holding Company Common Stock, neither Holding
Company nor any of its controlled Affiliates will own an equity interest in a
direct-to-home enterprise offering predominantly Spanish language programming in
the Americas or the Iberian Peninsula.
(e) First Offer Rights. In the event that Holding Company determines
------------------
to launch a satellite with the following frequencies: Ku BSS frequencies (11.7
- - 12.5 Ghz in Region 1, 12.2 - 12.7 Ghz in Region 2 and 11.7 - 12.2 Ghz in
Region 3) (the "BSS Band") into any of the following orbital slots as such
--------
orbital slots may be modified in the FCC authorization process, the ITU
registration process, or in the course of frequency coordination with other
systems: East Longitude: 36 degrees, 40 degrees, 48 degrees, 54 degrees, 101
degrees, 124.5 degrees, 132 degrees, 149 degrees, 164 degrees and 173 degrees;
and West Longitude: 49 degree and 67 degree (the "BSS Satellites"), the Company
--------------
shall give HE or its designated Subsidiaries (referred to herein as the "HE
Designee") notice of such determination and the HE Designee shall have the
opportunity (the "First Opportunity") to enter into a full life service
-----------------
agreement with respect to some or all, but not less than half of the available
capacity in the BSS Band on the applicable BSS Satellite, of the BSS
transponders (the "BSS Transponders")
----------------
8
<PAGE>
on the first BSS Satellite that the Company intends to place into each such slot
on terms and conditions to be negotiated in good faith and consistent with
normal business practice. The negotiation period with respect to capacity on
each such BSS Satellite shall be for three months (the "Negotiation Period").
------------------
The Negotiation Period may be initiated by either party on notice to the other
at any time within the time period set forth below. Applied separately to each
BSS Satellite, the Negotiation Period shall begin on the date on which the
Company notifies the HE Designee of a firm commitment to construct a BSS
Satellite; and shall commence not more than thirty months prior to the proposed
launch of the BSS Satellite and end not later than fifteen (15) months prior to
the date that the BSS Satellite is scheduled to be launched. If negotiations are
not initiated by either party by such date or successfully concluded with a
binding service agreement within the Negotiation Period, unless HE has given
Company a final offer (as defined below), neither party shall have any further
obligation pursuant to this Section 3(e), with respect to the BSS Satellite in
question. The conclusion or failure to conclude such an agreement as to one
orbital slot shall not, however, affect the parties' rights and obligations
hereunder as to the remaining BSS Satellites for other orbital slots referenced
in this Section, if still extant.
At any time prior to the end of the applicable negotiation period
specified above, HE shall have the right to make to the Company HE's "best and
final offer" (a "Final Offer") of the price at which it is willing to enter into
-----------
an end of life service agreement for a stated number of BSS Transponders on the
BSS Satellite, which must be on terms and conditions that are otherwise
acceptable to the Company.
If HE makes the Final Offer, for as long as it is held open (i.e.,
that it may be accepted by the Company without HE's subsequent right to withdraw
it), the Company will not, without first offering HE the opportunity to do so,
enter into a purchase or long term transponder service agreement for the same
number or fewer BSS Band transponders than proposed by HE at a lower price per
BSS Transponder (which, for the purposes of comparison, will be calculated on a
net present value basis as determined by the Company, but notified to HE so that
HE may make an adjustment in its offer to reflect this net present value) than
the price stated in the Final Offer. The Company may condition its offer to HE
on HE's acceptance of such other price, quantity, length of term and other terms
and conditions that the Company would offer a third party at the time (the
"Revised Offer"). HE shall have ten (10) days to accept the Company's Revised
- --------------
Offer or it shall be deemed to have been rejected. For the avoidance of doubt,
the previous sentence shall not apply to the Company's acceptance of the Final
Offer, as to which no further acceptance or rejection by HE is required or
permitted. The Company shall also notify HE at such time as the Company lowers
its price for long term transponder agreements on the applicable BSS satellite
for the number of transponders and for the service terms which had been included
in the Final Offer, which notice shall be given not fewer than ten (10) business
days before the reduced price is offered to any third party, during which period
HE will have the right to accept such revised offer. As used in this Section
3(e), "Company" or "Holding Company" includes its Subsidiaries or any of them.
4. Representations and Warranties of Minority Stockholders. Each
-------------------------------------------------------
Minority Stockholder hereby severally and not jointly (and solely with respect
to itself and the Shares owned of record or beneficially by such Stockholder)
represents and warrants to HCI and the Company as follows:
9
<PAGE>
(a) Ownership of Shares. Such Minority Stockholder is the record and
-------------------
beneficial owner of the Shares set forth on Exhibit A hereto, and such shares
constitute all of the Shares owned of record or beneficially by such Minority
Stockholder. With respect to the number of shares set forth opposite such
Minority Stockholder's name on Exhibit A hereto, and with the exceptions noted
thereon, such Minority Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2 and 3 hereof,
sole power of disposition, sole power of conversion, sole power to demand
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with no limitations, qualifications or restrictions on
such rights, subject to applicable securities laws and the terms of this
Agreement.
(b) Due Authorization. Such Minority Stockholder is, as applicable,
-----------------
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all requisite capacity, power and
authority to execute and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by such Minority Stockholder of this
Agreement and the performance by such Minority Stockholder of its obligations
hereunder have been duly and validly authorized by such Minority Stockholder and
no other proceedings on the part of such Minority Stockholder are necessary to
authorize the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by such Minority Stockholder and
constitutes a valid and binding agreement enforceable against such Stockholder
in accordance with its terms except to the extent (i) such enforcement may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
rights and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations, consents and
------------
approvals as contemplated by the Reorganization Agreement or the Univisa
Contribution Agreement and necessary for the consummation of the transactions
contemplated thereby which have been obtained, (i) no filing with, and no
permit, authorization, consent or approval of, any state or federal public body
or authority is necessary for the execution of this Agreement by such Minority
Stockholder and the consummation by such Minority Stockholder of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by such Minority Stockholder, the consummation by such Minority
Stockholder of the transactions contemplated hereby or compliance by such
Minority Stockholder with any of the provisions hereof shall (A) conflict with
or result in any breach of the organizational documents of such Minority
Stockholder, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
such Minority Stockholder is a party or by which such Minority Stockholder or
any of its properties or assets may be bound, or (C) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to such
Minority Stockholder or any of its properties or assets.
10
<PAGE>
5. Representations and Warranties of HCI. The Company and HCI
-------------------------------------
jointly and severally represent and warrant to each Minority Stockholder as
follows:
(a) Organization. Each such corporation is a corporation duly
------------
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power or other
power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by such corporation of this
Agreement and the performance by such corporation of its obligations hereunder
have been duly and validly authorized by all necessary corporate action of such
corporation.
(b) Agreement. This Agreement has been duly and validly executed and
---------
delivered by such corporation and constitutes a valid and binding agreement of
such corporation enforceable against it in accordance with its terms, except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency,
or other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought.
(c) No Conflicts. Except for filings, authorizations, consents, and
------------
approvals as contemplated by the Reorganization Agreement or the Univisa
Contribution Agreement and necessary for the consummation of the transactions
contemplated thereby which have been obtained, (i) no filing with, and no
permit, authorization, consent or approval of, any state or federal public body
or authority is necessary for the execution of this Agreement by such
corporation and the consummation by such corporation of the transactions
contemplated hereby, and (ii) none of the execution and delivery of this
Agreement by such corporation, the consummation by such corporation of the
transaction contemplated hereby or compliance by such corporation with any of
the provisions hereof shall (A) conflict with or result in any breach of the
charter or bylaws of such corporation, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third-party right of termination, cancellation, material
modifications or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such corporation is a party or by which such
corporation of its properties or assets may be bound, or (C) violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
such corporation or its properties or assets.
6. Legend.
------
(a) Each Stockholder severally and not jointly agrees that it will not
request Holding Company to register the transfer (by book-entry or otherwise) of
any certificate or uncertificated interest representing any of the Shares,
unless such transfer is made in compliance with this Agreement.
(b) Each Stockholder severally and not jointly agrees that it shall
promptly after the date hereof surrender to Holding Company all certificates
representing the Shares held by such Stockholder, and Holding Company shall
place the following legend on such
11
<PAGE>
certificates, which legend shall remain on such certificates until the sale of
such Shares to a person who is not a Stockholder or the termination of this
Agreement, whichever is earlier:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AGREEMENT, DATED AS OF MAY 16, 1997 BETWEEN STOCKHOLDERS AND THE
COMPANY. THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND
VOTING. A COPY OF SUCH AGREEMENT IS AVAILABLE AT THE PRINCIPAL
OFFICE OF THE COMPANY."
7. Term of Agreement. This Agreement has been entered into in
-----------------
connection with the transactions contemplated by the Reorganization Agreement
described in Recital A and the Univisa Contribution Agreement described in
Recital B and shall become effective upon the Closing. This Agreement shall
terminate upon the earlier of (i) five years from the Closing Date, or (ii) the
occurrence of a Termination Event. Notwithstanding the foregoing, the provisions
of Sections 2(c) (Standstill), 3(b) (Transactions with Affiliates), 3(c) and (d)
(covenants not to compete), 3(e) (first offer), and 8 (miscellaneous) shall
terminate five years after the Closing Date.
8. Miscellaneous.
-------------
(a) Expenses. All costs and expenses incurred in connection with this
--------
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
(b) Notices. All notices, requests, demands and other communications
-------
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
i. if to the Company, to:
PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Frederick A. Landman
Telephone: (203) 622-6664
Telecopy: (203) 622-9163
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
12
<PAGE>
New York, New York 10112
Attention: Denis J. Friedman, Esq.
Telephone: (212) 408-5200
Telecopy: (212) 541-5369
ii. if to HCI, to:
Hughes Communications, Inc.
P.O. Box 9712
Long Beach, CA 90810-9928
Attention: President
Telephone: (310) 525-5010
Telecopy: (310) 525-5015
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Bruce R. Lederman, Esq.
Telephone: (213) 485-1234
Telecopy: (213) 891-8763
iii. if to the Class A Holders, to:
Patrick J. Costello
c/o PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Frederick A. Landman
Telephone: (203) 622-6664
Telecopy: (203) 622-9163
with a copy to:
Cummings & Lockwood
4 Stamford Plaza, CT 06904
Attn: John Musicaro
Telephone: (203) 351-4370
Telecopy: (203) 351-4499
iv. if to S Company, to:
Satellite Company, LLC
Fonovisa Centroamerica, S.A.
De Popa de Curridabat 25 Mts. Este
Edificio Galerias del Este
13
<PAGE>
Local 8
San Jose, Costa Rica
Attention: Jorge Suarez
Telephone: 011-506-253-0758
Telecopy: 011-506-224-0836
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Joseph A. Stern, Esq.
Telephone: (212) 859-8000
Telecopy: (212) 859-4000
(c) Interpretation. When a reference is made in this Agreement to
--------------
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties. All terms defined in this
Agreement in the singular shall have comparable meanings when used in the
plural, and vice versa, unless otherwise specified.
(d) Entire Agreement; No Third-Party Beneficiaries. This Agreement
----------------------------------------------
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
(e) Assignment. Except to a Permitted Transferee, neither this
----------
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (whether by operation of law or otherwise) by any Minority Stockholder
without the consent of HCI or by HCI or its Affiliates without the consent of
Minority Stockholders holding 66 2/3% of the Shares held by Minority
Stockholders, which consent may be granted or withheld in such party's
discretion. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns. No person who is not a Stockholder or
Permitted Transferee who acquires Shares shall have any rights under this
Agreement except to the extent that the assignment thereof has been approved as
required by Section 8(e), nor any obligations hereunder except to the extent
expressly assumed.
(f) Governing Law. This Agreement shall be construed, interpreted and
-------------
the rights of the parties determined in accordance with the laws of the State of
Delaware (without reference to the choice of law provisions), except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject
14
<PAGE>
of this Agreement, and as to those matters the law of the jurisdiction under
which the respective entity derives its powers shall govern.
(g) Severability. Each party agrees that, should any court or other
------------
competent authority hold any provision of this Agreement or part hereof to be
null, void or unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required hereby, the
validity, legality and enforceability of the remaining provisions and
obligations contained or set forth herein shall not in any way be affected or
impaired thereby. Upon any such holding that any provision of this Agreement is
null, void or unenforceable, the parties will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
by this Agreement are consummated to the extent possible. Except as otherwise
contemplated by this Agreement, to the extent that a party hereto took an action
inconsistent herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other competent authority,
such party shall incur no liability or obligation unless such party did not in
good faith seek to resist or object to the imposition or entering of such order
or judgment.
(h) Injunctive Relief. The parties acknowledge that it will be
-----------------
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.
(i) Attorneys' Fees. If any party to this Agreement brings an action
---------------
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
(j) Cumulative Remedies. All rights and remedies of either party
-------------------
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
(k) Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.
(l) Amendments, Waivers, Etc. This Agreement may not be amended,
-------------------------
changed, supplemented, or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the parties hereto;
provided that performance hereof by any Minority Stockholder may be waived by
HCI and performance hereof by HCI, its Affiliates or the Company may be waived
by Minority Stockholders holding 66 2/3 % of the Shares held by Minority
Stockholders.
15
<PAGE>
(m) Obligations of Stockholders. The liabilities and obligations of
---------------------------
each Stockholder under any provision of this Agreement are several and not joint
and apply solely to such Stockholder and to the Shares held of record or
beneficially owned by such Stockholder. No Stockholder shall have any liability
or obligation under this Agreement for any act, omission or breach by any other
Stockholder.
(n) Service of Process. Each of the parties hereto irrevocably
------------------
consents to the service of any process, pleading, notices or other papers by the
mailing of copies thereof by registered, certified or first class mail, postage
prepaid, to such party at such party's address set forth herein, or by any other
method provided or permitted under Delaware law. Additionally, each party hereby
appoints RL&F Service Corp., One Rodney Square, Wilmington, Delaware 19810, as
agent for service of process in Delaware.
(o) Consent and Jurisdiction. Each party irrevocably and
------------------------
unconditionally agrees and consents that any suit, action or other legal
proceeding arising out of or related to this Agreement shall be brought and
heard in New Castle County, State of Delaware, and each party irrevocably
consents to personal jurisdiction in any and all tribunals in said County.
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Stockholder Agreement as of the date first above written.
MAGELLAN INTERNATIONAL, INC.
By: /s/ Charles H. Noski
-------------------------------
Name: Charles H. Noski
Title: President
HUGHES COMMUNICATIONS, INC.
By: /s/ Jerald F. Farrell
-------------------------------
Name: Jerald F. Farrell
Title: President
SATELLITE COMPANY, L.L.C.
By: /s/ Jorge Suarez Barbosa
-------------------------------
Name: Jorge Suarez Barbosa
Title: General Manager
S-1
<PAGE>
CLASS A STOCKHOLDERS
/s/ Mary Anselmo
------------------------------------------------------------
Name: MARY ANSELMO, individually and as a trustee of the
Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995 and as a co-trustee of
RAYCE ANSELMO TRUST DATED DECEMBER 23, 1991
/s/ Frederick A. Landman
------------------------------------------------------------
Name: FREDERICK A. LANDMAN, individually and as a trustee
of the Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995
/s/ Lourdes Saralegui
------------------------------------------------------------
Name: LOURDES SARALEGUI, individually and as a trustee of
the Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995
/s/ Pier Landman
------------------------------------------------------------
Name: PIER LANDMAN, individually and as the sole trustee of
the CHLOE LANDMAN TRUST DATED JUNE 10, 1988 and the
sole trustee of the RISSA LANDMAN TRUST DATED JUNE
10, 1988
/s/ Patrick J. Costello
------------------------------------------------------------
Name: PATRICK J. COSTELLO, as trustee of the FREDERICK A.
LANDMAN IRREVOCABLE TRUST DATED DECEMBER 22, 1995 and
as a successor trustee of the RAYCE ANSELMO TRUST
DATED DECEMBER 23, 1991
S-2
<PAGE>
/s/ Reverge Anselmo
------------------------------------------------------------
Name: REVERGE ANSELMO, individually and as a trustee of the
Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995
S-3
EXHIBIT 4.2
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of May 16, 1997, is entered into by and among MAGELLAN
INTERNATIONAL, INC., a Delaware corporation (the "Company"), and the persons
-------
listed on the signature pages hereof (the "Stockholders").
------------
RECITALS
A. The Company and the Stockholders desire to enter into this
Agreement for the purpose of granting to the Stockholders certain rights with
respect to registering under the Securities Act of 1933, as amended, shares of
Common Stock, par value $.01 per share, of the Company.
B. The Common Stock is being acquired by the Stockholders pursuant
to the transactions (the "Transactions") contemplated by the Agreement and Plan
------------
of Reorganization, dated as of September 20, 1996, among Panamsat Corporation,
Hughes Communications, Inc., and the Company, among others (the "Plan of
-------
Reorganization"), and the Stock Contribution and Exchange Agreement, dated as of
- --------------
September 20, 1996, among Satellite Company, L.L.C., Hughes Communications,
Inc., and the Company, among others (the "Exchange Agreement").
------------------
C. The Stockholders are also parties to a Stockholder Agreement of
even date (the "Stockholder Agreement").
---------------------
AGREEMENT
In consideration of the Recitals and mutual promises contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms
-----------
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 5 hereof.
------
"Affiliate" means, with respect to any specified person, any other
---------
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day that is not a Saturday, a Sunday or a
------------
legal holiday on which banking institutions in the State of New York are not
required to be open.
1
<PAGE>
"Capital Stock" means, with respect to any person, any and all shares,
-------------
interests, participations or other equivalents (however designated) of corporate
stock issued by such person, including each class of common stock and preferred
stock of such person.
"Class A Holder" means a Holder whose Common Stock was received in the
--------------
Transactions in respect of the Class A Common Stock or common stock of Panamsat
Corporation into which such Class A Common Stock has been converted.
"Class B Holder" means a Holder whose Common Stock was received in the
--------------
Transactions pursuant to the Exchange Agreement.
"Common Stock" means the Common Stock, par value $0.01 per share, of
------------
the Company issued to any Holder named on the signature pages hereof in the
Transactions or any other shares of capital stock or other securities of the
Company into which such shares of Common Stock shall be reclassified or changed,
including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
"Company" shall have the meaning set forth in the heading hereof.
-------
"Delay Period" shall have the meaning set forth in Section 2(d)
------------
hereof.
"Demand Notice" shall have the meaning set forth in Section 2(a)
-------------
hereof.
"Demand Registration" shall have the meaning set forth in Section 2(b)
-------------------
hereof.
"Effectiveness Period" shall have the meaning set forth in Section
--------------------
2(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the SEC promulgated thereunder.
"Hold Back Period" shall have the meaning set forth in Section 4
----------------
hereof.
"Holder" means a person who owns Registrable Shares and is either (i)
------
a Stockholder or (ii) a Permitted Transferee.
"Inclusion Notice" shall have the meaning set forth in Section 2(a).
----------------
"Hughes Communications, Inc. Holder" means Hughes Communications, Inc.
----------------------------------
and any Holder whose Common Stock was issued to Hughes Communications, Inc. in
the Transactions.
"Interruption Period" shall have the meaning set forth in Section 5
-------------------
hereof.
2
<PAGE>
"Permitted Assignee" means a Holder who acquires (a) more than $ 15
------------------
million in value of Common Stock at the date of transfer from a Holder, or (b)
Common Stock from a Holder in a transfer in which consent to assignment of this
Agreement is granted pursuant to Section 10(e), in either case in a transfer
exempt pursuant to Rule "4(1-1/2)" (or any similar private transfer exemption),
provided that in each case the transferee assumes and agrees to perform and
becomes a party to this Agreement.
"Permitted Transferees" means, as to any Hughes Communications, Inc.
---------------------
Holder, any controlled Affiliate of GM or any Permitted Transferee; as to S
Company, Grupo Televisa, S.A., any controlled Affiliate of Grupo Televisa, S.A.,
or any Permitted Transferee; and as to the Class A Holders, (A) any other Class
A Holder, (B) any person who is the spouse or former spouse of, or any lineal
descendent of, or any spouse of such lineal descendant of, or the grandparent,
parent, brother or sister of, or spouse of such brother or sister of, a Class A
Holder or Permitted Transferee of such person; (C) upon the death of any Class A
Holder or any Permitted Transferee of such person, the executors of the estate
of such Class A Holder or Permitted Transferee, any of such Class A Holder's or
such Permitted Transferee's heirs, testamentary trustees, devisees, or legatees;
(D) any trust principally for the benefit of one or more of the foregoing Class
A Holders or Permitted Transferees; (E) upon the disability of any Class A
Holder or Permitted Transferee, any guardian or conservator of such Class A
Holder or Permitted Transferee; or (F) any corporation, partnership or other
entity if all of the beneficial ownership is held by Class A Holders or any
Permitted Transferees; and as to any Stockholders, any person who is a Permitted
Assignee; provided that in each case such transferee assumes and agrees to
perform and becomes a party to this Agreement.
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Piggyback Registration" shall have the meaning set forth in Section 3
----------------------
hereof.
"Prospectus" means the prospectus included in any Registration
----------
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Registrable Shares" means shares of Common Stock unless (i) they have
------------------
been effectively registered under Section 5 of the Securities Act and disposed
of pursuant to an effective Registration Statement, or (ii) all of such Common
Stock of a Holder can be freely sold and transferred without restriction under
Rule 144 or Rule 145 under the Securities Act or any successor rule such that,
after any such transfer referred to in this clause (ii), such securities may be
freely transferred without restriction under the Securities Act. Notwithstanding
the foregoing, any shares of Common Stock held by a Stockholder shall be
"Registrable Shares"
3
<PAGE>
until such Stockholder ceases to own at least 1% of the then outstanding Common
Stock, $ .01 par value, of the Company. Further, no Holder who is not a
Stockholder shall be deemed to own Registrable Shares after five years from the
date hereof.
"Registration" means registration under the Securities Act of an
------------
offering of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.
"Registration Period" means, as to any Holder, the period beginning on
-------------------
the date hereof and ending on the date when such Holder no longer owns any
Registrable Shares.
"Registration Statement" means any registration statement under the
----------------------
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
"Shelf Registration" shall have the meaning set forth in Section 2(b)
------------------
hereof.
"Stockholder Agreement" shall have the meaning set forth in Recital C.
---------------------
"Transactions" shall have the meaning set forth in Recital B.
------------
"Underwritten Registration or Underwritten Offering" means a
------------------------- ---------------------
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.
2. Demand Registration.
-------------------
(a) Subject to the last sentence of this Section 2(a), any Holder
shall have the right during the Registration Period, by written notice (the
"Demand Notice") given to the Company, to request the Company to register under
- --------------
and in accordance with the provisions of the Securities Act all or any portion
of the Registrable Shares designated by such Holders; provided, however, that
the aggregate value (at the respective dates of such notices) of Registrable
Shares requested to be registered pursuant to any Demand Notice and pursuant to
any related Inclusion Notices received pursuant to the following sentence shall
be at least $ 100 million. Upon receipt of any such Demand Notice, the Company
shall promptly notify all other Holders of the receipt of such Demand Notice and
allow them the opportunity to include Registrable Shares held by them in the
proposed registration by submitting their own written notice to the Company
requesting inclusion of a specified number of such Holders' Registrable
Securities (the "Inclusion Notice"). In connection with any Demand Registration
----------------
in which more
4
<PAGE>
than one Holder participates, in the event that such Demand Registration
involves an underwritten offering and the managing underwriter or underwriters
participating in such offering advise in writing the Holders of Registrable
Shares to be included in such offering that the total number of Registrable
Shares to be included in such offering exceeds the amount that can be sold in
(or during the time of) such offering without delaying or jeopardizing the
success of such offering (including the price per share of the Registrable
Shares to be sold), then the amount of Registrable Shares to be offered for the
account of such Holders shall be reduced pro rata on the basis of the number of
Registrable Shares to be registered by each such Holder; provided if the
registration of Registrable Shares held by Mary Anselmo is necessary in
connection with any payment of estate taxes by her estate, such registration by
the estate of Mary Anselmo shall have priority over any registration of
Registrable Shares by a Class B Holder or any Holder who acquired such
securities directly or indirectly from or through a Class B Holder. The Class A
Holders as a group and the Class B Holders as a group shall each be entitled to
three Demand Registrations pursuant to this Section 2; Hughes Communications,
Inc. shall be entitled to six Demand Registrations pursuant to this Section 2;
if any such Demand Registration does not become effective or is not maintained
for a period (whether or not continuous) of at least 180 days (or such shorter
period as shall terminate when all the Registrable Shares covered by such Demand
Registration (other than any shares reserved for issuance upon exercise of the
underwriters' overallotment option) have been sold pursuant thereto), the
affected Holders will be entitled to an addition Demand Registration pursuant
hereto. It is agreed that the registration of Registrable Shares pursuant to an
Inclusion Notice shall not be deemed to be a Demand Registration. Nothing in
this Section 2(a) shall limit any rights pursuant to Section 3 hereof. Nothing
in this Agreement shall limit the rights and obligations of the parties under
the Stockholder Agreement, including pursuant to Sections 2(a) and 2(b) thereof.
Notwithstanding anything herein to the contrary, the exercise of each Demand
Registration under this Section 2(a) by the Class A Holders shall require the
approval of the Class A Holders, and their Permitted Transferees, owning a
majority of the Registrable Shares then owned by all Class A Holders and their
Permitted Transferees.
(b) The Company, within 45 days of the date on which the Company
receives a Demand Notice given by Holders in accordance with Section 2(a)
hereof, shall file with the SEC, and the Company shall thereafter use
commercially reasonable efforts to cause to be declared effective, a
Registration Statement on the appropriate form for the registration and sale, in
accordance with the intended method or methods of distribution, of the total
number of Registrable Shares specified by the Holders in such Demand Notice,
which may include a "shelf" registration (a "Shelf Registration") pursuant to
------------------
Rule 415 under the Securities Act (a "Demand Registration").
-------------------
(c) The Company shall use commercially reasonable efforts to cause the
Registration Statement to be declared effective and to keep each Registration
Statement filed pursuant to this Section 2 continuously effective and usable for
the resale of the Registrable Shares covered thereby (i) in the case of a
Registration that is not a Shelf Registration, for a period of 90 days from the
date on which the SEC declares such Registration Statement effective and (ii) in
the case of a Shelf Registration, for a period of 180 days from the date on
which the SEC declares such Registration Statement effective, in either case (x)
until all the Registrable Shares covered by such Registration Statement (other
than any shares reserved for issuance upon
5
<PAGE>
exercise of the underwriters' overallotment option) have been sold pursuant to
such Registration Statement, and (y) as such period may be extended pursuant to
this Section 2.
(d) The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 2, or suspend the use of any effective
Registration Statement under this Section 2, for a reasonable period of time,
but not in excess of 90 days (a "Delay Period"), if the chief executive officer
------------
or chief financial officer of the Company determines that in such executive
officer's reasonable judgment and good faith the registration and distribution
of the Registrable Shares covered or to be covered by such Registration
Statement would materially interfere with any pending material financing,
acquisition or corporate reorganization or other material corporate development
involving the Company or any of its subsidiaries or would require premature
disclosure thereof and promptly gives the Holders written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the period of the anticipated delay;
provided, however, that (i) the aggregate number of days included in all Delay
Periods during any consecutive 12 months shall not exceed the aggregate of (x)
120 days minus (y) the number of days occurring during all Hold Back Periods and
Interruption Periods during such consecutive 12 months and (ii) a period of at
least 60 days shall elapse between the termination of any Delay Period, Hold
Back Period or Interruption Period and the commencement of the immediately
succeeding Delay Period. If the Company shall so postpone the filing of a
Registration Statement, the Holders of Registrable Shares to be registered shall
have the right to withdraw the request for registration by giving written notice
from the Holders of a majority of the Registrable Shares that were to be
registered to the Company within 45 days after receipt of the notice of
postponement or, if earlier, the termination of such Delay Period (and, in the
event of such withdrawal, such request shall not be counted for purposes of
determining the number of requests for registration to which the Holders of
Registrable Shares are entitled pursuant to this Section 2). The time period for
which the Company is required to maintain the effectiveness of any Registration
Statement shall be extended by the aggregate number of days of all Delay
Periods, all Hold Back Periods and all Interruption Periods occurring during
such Registration and such period and any extension thereof is hereinafter
referred to as the "Effectiveness Period." The Company shall not be entitled to
--------------------
initiate a Delay Period unless it shall (A) to the extent permitted by
agreements with other security holders of the Company, concurrently prohibit
sales by such other security holders under registration statements covering
securities held by such other security holders and (B) in accordance with the
Company's policies from time to time in effect, forbid purchases and sales in
the open market by senior executives of the Company.
(e) The Company shall not include any securities that are not
Registrable Shares in any Registration Statement filed pursuant to this Section
2 without the prior written consent of (i) the Class A Holders of a majority in
number of the Registrable Shares held by Class A Holders covered by such
Registration Statement, and (ii) the Class B Holder(s) of a majority in number
of the Registrable Shares held by such Class B Holders covered by such
Registration Statement, and (iii) Hughes Communications, Inc. Holders with
respect to Registrable Shares held by such Hughes Communications, Inc. Holders
covered by such Registration Statement.
6
<PAGE>
(f) Holders of a majority in number of the Registrable Shares to be
included in a Registration Statement pursuant to this Section 2 may, at any time
prior to the effective date of the Registration Statement relating to such
Registration, revoke such request by providing a written notice to the Company
revoking such request. The Holders of Registrable Shares who revoke such request
shall reimburse the Company for all its out-of-pocket expenses incurred in the
preparation, filing and processing of the Registration Statement; provided,
however, that, if such revocation was pursuant to Section 2(d) (for a
postponement) or was based on the Company's failure to comply in any material
respect with its obligations hereunder, such reimbursement shall not be
required, and such registration shall not count against the maximum number of
Demand Registrations to which the applicable Holders are entitled under Section
2(a). In addition, if pursuant to the terms of this Section 2(f), the Holders
reimburse the Company for its out of pocket expenses incurred in the
preparation, filing and processing of any Registration Statement requested, and
subsequently revoked by such Holder(s), such registration shall not count
against the maximum number of Demand Registrations to which the applicable
Holder(s) are entitled under Section 2(a).
3. Piggyback Registration.
----------------------
(a) Right to Piggyback. If at any time during the Registration Period
------------------
the Company proposes to file a registration statement under the Securities Act
with respect to a public offering of securities of the same type as the
Registrable Shares pursuant to a firm commitment underwritten offering solely
for cash for its own account (other than a registration statement (i) on Form S-
8 or any successor forms thereto, or (ii) filed solely in connection with a
dividend reinvestment plan or employee benefit plan of the Company or its
Affiliates) or for the account of any holder of securities of the same type as
the Registrable Shares (to the extent that the Company has the right to include
Registrable Shares in any registration statement to be filed by the Company on
behalf of such holder), then the Company shall give written notice of such
proposed filing to the Holders at least 15 days before the anticipated effective
date. Such notice shall offer the Holders the opportunity to register such
amount of Registrable Shares as they may request (a "Piggyback Registration").
----------------------
Subject to Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 10 days after notice has
been given to the Holders. Each Holder shall be permitted to withdraw all or any
portion of the Registrable Shares of such Holder from a Piggyback Registration
at any time prior to the effective date of such Piggyback Registration;
provided, however, that if such withdrawal occurs after the filing of the
Registration Statement with respect to such Piggyback Registration, the
withdrawing Holders shall reimburse the Company for the portion of the
registration expenses payable with respect to the Registrable Shares so
withdrawn.
(b) Priority on Piggyback Registrations. The Company shall permit the
-----------------------------------
Holders to include all such Registrable Shares on-the-same terms and conditions
as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or the managing underwriter or
underwriters participating in such offering advise the Holders in writing that
the total amount of securities requested to be included in such Piggyback
Registration exceeds the amount which can be sold in (or during the time of)
such offering without delaying or jeopardizing the success of the offering
(including the price per
7
<PAGE>
share of the securities to be sold), then the amount of securities to be offered
for the account of the Holders and other holders of securities who have
piggyback registration rights with respect thereto shall be reduced (to zero if
necessary) pro rata on the basis of the number of common stock equivalents
requested to be registered by each such Holder or holder participating in such
offering.
(c) Right to Abandon. Nothing in this Section 3 shall create any
----------------
liability on the part of the Company to the Holders if the Company in its sole
discretion should decide not to file a registration statement proposed to be
filed pursuant to Section 3(a) hereof or to withdraw such registration statement
subsequent to its filing and prior to the later of its effectiveness or the
release of the Registrable Shares for public offering by the managing
underwriter, in the case of an underwritten public offering, regardless of any
action whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.
4. Holdback Agreement. If (i) the Company shall file a registration
------------------
statement with respect to the Common Stock or similar securities or securities
convertible into, or exchangeable or exercisable for, such securities and (ii)
the Company (in the case of a nonunderwritten public offering by the Company
pursuant to such registration statement) advises the Holders in writing that a
public sale or distribution of Registrable Shares would materially adversely
affect such offering or the managing underwriter or underwriters (in the case of
an underwritten public offering by the Company pursuant to such registration
statement) advises the Company in writing (in which case the Company shall
notify the Holders) that a public sale or distribution of Registrable Shares
would have material adverse impact on such offering, then each Holder shall, to
the extent not inconsistent with applicable law, refrain from effecting any
public sale or distribution of Registrable Shares during the 10 days prior to
the effective date of such registration statement and until the earliest of (A)
the abandonment of such offering, (B) 90 days from the effective date of such
registration statement and (C) if such offering is an underwritten offering, the
termination of any "hold back" period obtained by the underwriter or
underwriters in such offering from the Company in connection therewith (each
such period, a "Hold Back Period").
----------------
5. Registration Procedures. In connection with the registration
-----------------------
obligations of the Company pursuant to and in accordance with Sections 2 and 3
hereof (and subject to Sections 2 and 3 hereof), the Company shall use
commercially reasonable efforts to effect such registration to permit the sale
of such Registrable Shares in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible (but subject to Sections 2 and 3 hereof):
(a) At least ten (10) business days before filing a Registration
Statement or prospectus or any amendments or supplements thereto, furnish to the
Holders who are participating in such Registration Statement and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of such Holders and such underwriters
(and their respective counsel), and, in the case of a Demand Registration, the
Company will not file any Registration Statement or amendment thereto or any
prospectus
8
<PAGE>
or any supplement thereof to which the Registering Holders or the underwriters,
if any, shall reasonably object;
(b) prepare and file with the SEC a Registration Statement for the
sale of the Registrable Shares on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate in accordance with such
Holders' intended method or methods of distribution thereof, subject to Section
2(b) hereof, and, subject to the Company's right to terminate or abandon a
registration pursuant to Section 3(c) hereof, use commercially reasonable
efforts to cause such Registration Statement to become effective and remain
effective as provided herein;
(c) prepare and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such supplements
to the related Prospectus, as may be required by the rules, regulations or
instructions applicable to the Securities Act during the applicable period in
accordance with the intended methods of disposition specified by the Holders of
the Registrable Shares covered by such Registration Statement, make generally
available earnings statements satisfying the provisions of Section 11(a) of the
Securities Act (provided that the Company shall be deemed to have complied with
this clause if it has complied with Rule 158 under the Securities Act), and
cause the related Prospectus as so supplemented to be filed pursuant to Rule 424
under the Securities Act; provided, however, that before filing a Registration
Statement or Prospectus, or any amendments or supplements thereto (other than
reports required to be filed by it under the Exchange Act), the Company shall
furnish to the Holders of Registrable Shares covered by such Registration
Statement and their counsel for review and comment, copies of all documents
required to be filed;
(d) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated therein by
reference so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading:
(e) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of such Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification
of any Registrable Shares for sale in any jurisdiction in the United States;
9
<PAGE>
(f) furnish to the Holder of any Registrable Shares covered by such
Registration Statement, each counsel for such Holders and each managing
underwriter, if any, without charge, one conformed copy of such Registration
Statement, as declared effective by the SEC, and of each post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares of such
Holder covered by such Registration Statement in conformity with the
requirements of the Securities Act;
(g) prior to any public offering of Registrable Shares covered by such
Registration Statement, use commercially reasonable efforts to register or
qualify such Registrable Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Holders of such Registrable Shares shall
reasonably request in writing; provided, however, that the Company shall in no
event be required to qualify generally to do business as a foreign corporation
or as a dealer in any jurisdiction where it is not at the time so qualified or
to execute or file a general consent to service of process in any such
jurisdiction where it has not theretofore done so or to take any action that
would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
(h) upon the occurrence of any event contemplated by paragraph 5(d)(v)
above, prepare a supplement or post-effective amendment to such Registration
Statement or the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference and file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Shares being sold
thereunder (including upon the termination of any Delay Period), such Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(i) use commercially reasonable efforts to cause all Registrable
Shares covered by such Registration Statement to be listed on each securities
exchange or automated interdealer quotation system, if any, on which similar
securities issued by the Company are then listed or quoted;
(j) use commercially reasonable efforts to comply with all applicable
rules and regulations of the SEC and any securities exchange or regulatory body;
(k) on or before the effective date of such Registration Statement,
provide the transfer agent of the Company for the Registrable Shares with
printed certificates for the Registrable Shares covered by such Registration
Statement which are in a form eligible for deposit with The Depository Trust
Company;
(l) if such offering is an underwritten offering, make available for
inspection by any Holder of Registrable Shares included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any
10
<PAGE>
attorney, accountant or other agent retained by any such Holder or underwriter
(collectively, the "Inspectors"), such financial and other records and other
information, pertinent corporate documents and properties of any of the Company
and its subsidiaries and affiliates (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due diligence
responsibilities; provided, however, that the Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspector in writing are confidential shall not be disclosed to any Inspector
unless such Inspector signs a confidentiality agreement reasonably satisfactory
to the Company, which agreement shall permit the disclosure of such Records in
such Registration Statement or the related Prospectus if either (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction; provided however, that (A) any decision regarding the disclosure
of information pursuant to subclause (i) shall be made only after consultation
with counsel for the applicable Inspectors and the Company and (B) with respect
to any release of Records pursuant to subclause (ii), each Holder of Registrable
Shares agrees that it shall, promptly after learning that disclosure of such
Records is sought in a court having jurisdiction, give notice to the Company so
that the Company, at the Company's expense, may undertake appropriate action to
prevent disclosure of such Records; and
(m) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders of a majority of the Registrable
Shares being sold in connection therewith (including those reasonably requested
by the managing underwriters) in order to expedite or facilitate the disposition
of such Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters and counsel to the Holders
of the Registrable Shares being sold), addressed to each selling Holder of
Registrable Shares covered by such Registration Statement and each of the
underwriters as to the matters customarily covered in opinions requested in
underwritten offerings and such other matters may be reasonably requested by
such counsel and underwriters, (ii) use commercially reasonable efforts to
obtain "cold comfort" letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial data are,
or are required to be, included in the Registration Statement), addressed to
each selling Holder of Registrable Shares covered by the Registration Statement
(unless such accountants shall be prohibited from so addressing such letters by
applicable standards of the accounting profession) and each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings (iii) if requested and if an underwriting agreement is entered into,
provide indemnification provisions and procedures substantially to the effect
set forth in Section 8 hereof with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent required thereunder.
In addition, the Company agrees (i) not to effect any public sale or
distribution of its Common Stock, par value $.01 per share, or any securities
convertible into or exchangeable
11
<PAGE>
or exercisable for such securities, during the 10 days prior to the effective
date of any underwritten Demand or Piggyback Registration and until the earliest
of (A) the abandonment of such offering, or (B) the termination of any "hold
back" period reasonably requested by the underwriters (with exceptions for
issuances pursuant to outstanding options, warrants, and convertible or
exchangeable securities, pursuant to employee and dividend reinvestment plans,
and such other exceptions as are customary or agreed with the managing
underwriter).
The Company may require each Holder of Registrable Shares covered by a
Registration Statement to furnish such information regarding such Holder and
such Holder's intended method of disposition of such Registrable Shares as it
may from time to time reasonably request in writing. If any such information is
not furnished within a reasonable period of time after receipt of such request,
the Company may exclude such Holder's Registrable Shares from such Registration
Statement.
Each Holder of Registrable Shares covered by a Registration Statement
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(d)(ii), 5(d)(iii), 5(d)(iv) or 5(d)(v)
hereof, that such Holder shall forthwith discontinue disposition of any
Registrable Shares covered by such Registration Statement or the related
Prospectus until receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(h) hereof, or until such Holder is advised in writing
(the "Advice") by the Company that the use of the applicable Prospectus may be
------
resumed, and has received copies of any amended or supplemented Prospectus or
any additional or supplemental filings which are incorporated, or deemed to be
incorporated, by reference in such Prospectus (such period during which
disposition is discontinued being an "Interruption Period") and, if requested by
-------------------
the Company, the Holder shall deliver to the Company (at the expense of the
Company) all copies then in its possession, other than permanent file copies
then in such holder's possession, of the Prospectus covering such Registrable
Shares at the time of receipt of such request.
Each Holder of Registrable Shares covered by a Registration Statement
further agrees not to utilize any material other than the applicable current
preliminary prospectus or Prospectus in connection with the offering of such
Registrable Shares.
6. Registration Expenses. Whether or not any Registration Statement
---------------------
is filed or becomes effective, the Company shall pay all costs, fees and
expenses incident to the Company's performance of or compliance with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing preliminary and final prospectuses if the
printing of prospectuses is requested by the Holders or the managing
underwriter, if any), (iv) messenger, telephone and delivery expenses, (v) fees
and disbursements of counsel for the Company, (vi) fees and disbursements of all
independent certified public accountants of the Company (including expense of
any "cold comfort" letters required in connection with this Agreement) and all
other persons retained by the Company in connection with this Agreement and the
Registration Statement, and (vii) all other costs, fees and expenses incident to
the Company's performance or compliance
12
<PAGE>
with this Agreement. Notwithstanding the foregoing, the fees and expenses of any
persons retained by any Holder, including counsel for such Holders, and any
discounts, commissions or brokers' fees or fees of similar securities industry
professionals and any transfer taxes relating to the disposition of the
Registrable Shares by a Holder, will be payable by such Holder and the Company
will have no obligation to pay any such amounts.
7. Underwriting Requirements.
-------------------------
(a) Subject to Section 7(b) hereof, any Holder giving a Demand Notice
shall have the right, by written notice, to request that any Demand Registration
provide for an underwritten offering.
(b) In the case of any underwritten offering pursuant to a Demand
Registration, the Holders of a majority of the Registrable Shares covered by the
Demand Notice to be disposed of in connection therewith shall select the
institution or institutions that shall manage or lead such offering, which
institution or institutions shall be reasonably satisfactory to the Company. In
the case of any underwritten offering pursuant to a Piggyback Registration, the
Company shall select the institution or institutions that shall manage or lead
such offering.
8. Indemnification.
---------------
(a) Indemnification by the Company. The Company shall, without
------------------------------
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each Holder of Registrable Shares whose Registrable Shares are covered
by a Registration Statement or Prospectus, the officers, directors and agents
and employees of each of them, each Person who controls each such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgment, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"), as incurred, arising out of or based upon any untrue or alleged
------
untrue statement of a material fact contained in such Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by or on behalf of such Holder
expressly for use therein or by any underwriter in a Demand Registration;
provided, however, that the Company shall not be liable to any such Holder to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) having previously been furnished by or on
behalf of the Company with copies of the Prospectus, such Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale of Registrable Shares by such Holder to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have corrected in all material respects such untrue statement or alleged untrue
statement or such omission or alleged omission; and provided further, however,
that the Company shall not be liable in any such case to the extent that any
such Losses arise out of or are based upon an untrue statement
13
<PAGE>
or alleged untrue statement or omission or alleged omission in the Prospectus,
if (x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in all material respects in an amendment or supplement to
the Prospectus and (y) having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such Holder
thereafter fails to deliver such Prospectus as so amended or supplemented, prior
to or currently with the sale of Registrable Shares. In connection with any
Underwritten Offering, the Company will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act) to the same extent as provided above with respect to Indemnification of
Holders of Registrable Shares, or on such other terms as are reasonable and
customary and requested by the managing underwriter.
(b) Indemnification by Holder of Registrable Shares. In connection
-----------------------------------------------
with any Registration Statement in which a Holder is participating, such Holder
shall furnish to the Company in writing such information as the Company
reasonably requests for use in connection with such Registration Statement or
the related Prospectus and agrees to indemnify, to the full extent permitted by
law, the Company, its directors, officers, agents or employees, each Person who
controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) and the directors, officers, agents or employees
of such controlling Persons, from and against all Losses arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in such
Registration Statement or the related Prospectus or any amendment or supplement
thereto, or any preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue or alleged untrue statement or omission or
alleged omission is based upon any information so furnished in writing by or on
behalf of such Holder to the Company expressly for use in such Registration
Statement or Prospectus.
(c) If any Person shall be entitled to indemnity hereunder (an
"Indemnified Party"), indemnified party shall give prompt notice to the party
- ------------------
from which such indemnity is sought (the "Indemnifying Party") of any claim or
------------------
of the commencement of any proceeding with respect to indemnitee party seeks
indemnification or contribution pursuant hereto; provided, however, that the
delay or failure to so notify the indemnifying party shall not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced by such delay or failure. The
indemnifying party shall have the right, exercisable by giving written notice to
an indemnified party promptly after the receipt of written notice from such
indemnified party of such claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; provided, however, that (i)
an indemnified party shall have the right to employ separate counsel in any such
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (1) the indemnifying party agrees to pay such fees and expenses; (2) the
indemnifying party fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party; or (3) the named parties to any proceeding (including
impleaded parties) include both such indemnified
14
<PAGE>
party and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
that are inconsistent with those available to the indemnifying party or that a
conflict of interest is likely to exist among such indemnified party and any
other indemnified parties (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified
party); and (ii) subject to clause (3) above, the indemnifying party shall not,
in connection with any one such claim or proceeding or separate but
substantially similar or related claims or proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one firm of attorneys (together with appropriate
local counsel) at any time for all of the indemnified parties, or for fees and
expenses that are not reasonable. Whether or not such defense is assumed by the
indemnifying party, such indemnified party shall not be subject to any liability
for any settlement made without its consent. The indemnifying party shall not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect of such
claim or litigation for which such indemnified party would be entitled to
indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section
------------
8 is unavailable to an indemnified party in respect of any Losses (other than in
accordance with its terms), then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and such indemnified party, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the other hand, shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement of a material fact or omission or alleged
omission to state a material fact, has been taken by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent any such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the this Section 8(d).
Notwithstanding the provision of this Section 8(d), an indemnifying party that
is a Holder shall not be required to contribute any amount which is in excess of
the amount by which the total proceeds received by such Holder from the sale of
the Registrable Shares sold by such Holder (net of all underwriting discounts
and commissions) exceeds the amount of any damages that such indemnifying party
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
15
<PAGE>
9. Rule 144. If the Company shall have filed a registration
--------
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will timely file the reports required to be filed by
it under the Securities Act or the Exchange Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the Securities Act) and
the rules and regulations adopted by the SEC thereunder (or if the Company is
not required to file such reports, the Company will, upon the request of any
Holder of Registrable Shares, make publicly available other information), and
will take such further action as any Holder of Registrable Shares may reasonably
request, all to the extent required from time to time to enable such Holder of
Registrable Shares to sell Registrable Shares within the exemption provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Shares, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
10. Miscellaneous.
-------------
(a) Termination. This Agreement and the obligations of the Company
-----------
and the Holders hereunder (other than Section 8 hereof) shall terminate on the
first date on which no Registrable Shares remain outstanding.
(b) Notices. All notices, requests, demands and other communications
-------
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
i. if to the Company, to:
PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Frederick A. Landman
Telephone: (203) 622-6664
Telecopy: (203) 622-9163
16
<PAGE>
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Denis J. Friedman, Esq.
Telephone: (212) 408-5200
Telecopy: (212) 541-5369
ii. if to Hughes Communications, Inc., Hughes Communications Galaxy,
Inc. or Hughes Communications Satellite Services, Inc., to:
Hughes Communications, Inc.
P.O. Box 9712
Long Beach, CA 90810-9928
Attention: President
Telephone: (310) 525-5010
Telecopy: (310) 525-5015
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Bruce R. Lederman, Esq.
Telephone: (213) 485-1234
Telecopy: (213) 891-8763
iii. if to any of the Class A Stockholders listed
on the signature pages hereto, to:
Patrick J. Costello
c/o PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Frederick A. Landman
Telephone: (203) 622-6664
Telecopy: (203) 622-9163
with a copy to:
Cummings & Lockwood
4 Stamford Plaza, CT 06904
Attn: John Musicaro
Telephone: (203) 351-4370
Telecopy: (203) 351-4499
17
<PAGE>
iv. if to Satellite Company, L.L.C., to:
Satellite Company, L.L.C.
Fonovisa Centroamerica, S.A.
De Popa de Curridabat 25 Mts. Este
Edificio Galerias del Este
Local 8
San Jose, Costa Rica
Attention: Jorge Suarez
Telephone: 011-506-253-0758
Telecopy: 011-506-224-0836
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Joseph A. Stern, Esq.
Telephone: (212) 859-8000
Telecopy: (212) 859-4000
(c) Interpretation. When a reference is made in this Agreement to
--------------
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties. All terms defined in this
Agreement in the singular shall have the same comparable meanings when used in
the plural and vice versa, unless otherwise specified.
(d) Entire Agreement; No Third-Party Beneficiaries. This Agreement
----------------------------------------------
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
(e) Assignment. Neither this Agreement nor any of the rights,
----------
interests, or obligations hereunder shall be assigned (whether by operation of
law or otherwise) by any Holder without the consent of the Company, or by the
Company without the consent of Holders of at least a majority in number of the
Registrable Shares then outstanding provided that any Holder can assign its
rights hereunder to a Permitted Transferee or Permitted Assignee of $15 million
or more in value of Common Stock without the consent of the Company. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. In no event shall any transferee of Common Stock be entitled, solely as
a result of such transfer, to any of the benefits of this Agreement or to
enforce the same.
18
<PAGE>
(f) Governing Law. This Agreement shall be construed, interpreted and
-------------
the rights of the parties determined in accordance with the laws of the State of
Delaware (without reference to the choice of law provisions), except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
(g) Severability. Each party agrees that, should any court or other
------------
competent authority hold any provision of this Agreement or part hereof to be
null, void or unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required hereby, the
validity, legality and enforceability of the remaining provisions and
obligations contained or set forth herein shall not in any way be affected or
impaired thereby. Upon any such holding that any provision of this Agreement is
null, void or unenforceable, the parties will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
by this Agreement are consummated to the extent possible. Except as otherwise
contemplated by this Agreement, to the extent that a party hereto took an action
inconsistent herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other competent authority,
such party shall incur no liability or obligation unless such party did not in
good faith seek to resist or object to the imposition or entering of such order
or judgment.
(h) Injunctive Relief. The parties acknowledge that it will be
-----------------
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.
(i) Attorneys' Fees. If any party to this Agreement brings an action
---------------
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
(j) Cumulative Remedies. All rights and remedies of any party hereto
-------------------
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
(k) Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.
19
<PAGE>
(l) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Shares then outstanding, or the Holders
have obtained the written consent of the Company.
(m) Other Agreements. Without the approval of Holders owning at least
----------------
two-thirds in interest of each of the Hughes Communications, Inc. Holders, the
Class A Holders, and the Class B Holders of the Registrable Shares, the Company
shall not enter into any registration rights agreement ranking pari passu or
---- -----
senior to this Agreement.
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Registration Rights Agreement as of the date first above written.
MAGELLAN INTERNATIONAL, INC.
By: /s/ Charles H. Noski
--------------------------------
Name: Charles H. Noski
Title: President
STOCKHOLDERS
------------
HUGHES COMMUNICATIONS, INC.
HUGHES COMMUNICATIONS GALAXY, INC.
HUGHES COMMUNICATIONS
SATELLITE SERVICES, INC.
By: /s/ Jerald F. Farrell
-------------------------------
Name: Jerald F. Farrell
Title: President
SATELLITE COMPANY, L.L.C.
By: /s/ Jorge Suarez Barbosa
-------------------------------
Name: Jorge Suarez Barbosa
Title: General Manager
S-1
<PAGE>
CLASS A STOCKHOLDERS
/s/ Mary Anselmo
---------------------------------------------------------
Name: MARY ANSELMO, individually and as a trustee of the
Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995 and as a co-trustee
of RAYCE ANSELMO TRUST DATED DECEMBER 23, 1991
/s/ Frederick A. Landman
---------------------------------------------------------
Name: FREDERICK A. LANDMAN, individually and as a
trustee of the Article VII Trust created by the
RENE ANSELMO REVOCABLE TRUST DATED JUNE 10, 1994
and as a successor trustee under the Voting Trust
Agreement dated as of February 28, 1995
/s/ Lourdes Saralegui
---------------------------------------------------------
Name: LOURDES SARALEGUI, individually and as a trustee
of the Article VII Trust created by the RENE
ANSELMO REVOCABLE TRUST DATED JUNE 10, 1994 and as
a successor trustee under the Voting Trust
Agreement dated as of February 28, 1995
/s/ Pier Landman
---------------------------------------------------------
Name: PIER LANDMAN, individually and as the sole trustee
of the CHLOE LANDMAN TRUST DATED JUNE 10, 1988 and
the sole trustee of the RISSA LANDMAN TRUST DATED
JUNE 10, 1988
/s/ Patrick J. Costello
---------------------------------------------------------
Name: PATRICK J. COSTELLO, as trustee of the FREDERICK
A. LANDMAN IRREVOCABLE TRUST DATED DECEMBER 22,
1995 and as a successor trustee of the RAYCE
ANSELMO TRUST DATED DECEMBER 23, 1991
S-2
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/s/ Reverge Anselmo
---------------------------------------------------------
Name: REVERGE ANSELMO, individually and as a trustee of
the Article VII Trust created by the RENE ANSELMO
REVOCABLE TRUST DATED JUNE 10, 1994 and as a
successor trustee under the Voting Trust Agreement
dated as of February 28, 1995
S-3
EXHIBIT 4.3
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is entered into as of May 15, 1997
--
between HUGHES NETWORK SYSTEMS, INC., a corporation organized and existing under
the laws of Delaware ("Lender"), and MAGELLAN INTERNATIONAL, INC., a Delaware
corporation that will be renamed "PANAMSAT CORPORATION" upon consummation of the
Reorganization (as defined below)("Borrower").
WHEREAS, Borrower has requested Lender to extend a credit facility in the
amount of One Billion Seven Hundred Twenty Five Million Dollars
($1,725,000,000.00), to be used for Borrower's general corporate purposes
including, but not limited to, financing Borrower's acquisition of all of the
outstanding shares of Class A Common Stock, par value $.01 per share and Common
Stock, par value $.01 per share of PanAmSat Corporation ("PanAmSat") and all of
the outstanding shares of common stock, $.01 par value per share, of Univisa,
Inc. (the indirect holder of all outstanding shares of Class B common stock,
$.01 par value per share, of PanAmSat) in each case pursuant to the
Reorganization Agreement and the Univisa Contribution Agreement (as such terms
are defined below); and
WHEREAS, Lender is willing to extend such credit facility to Borrower,
subject to the terms and conditions of this Agreement;
NOW, THEREFORE, for good consideration, the receipt and sufficiency of
which is hereby acknowledged, Lender and Borrower agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall have
-----------
the meanings given:
"Base LIBOR Rate" applicable to a particular Interest Period shall mean a
rate per annum equal to the rate of interest at which U.S. dollar deposits with
comparable maturities are offered in immediately available funds in the London
Interbank Market at 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as published by the British Banker's
Association (Bloomberg Screen BBAM).
"Borrower" has the meaning set forth in the preamble to this Agreement.
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"Business Day" means a day other than a Saturday or Sunday on which
banks are open for business in both San Francisco, California and New York, New
York.
"Certificate of Designation" means the certificate of designation for
the 12 3/4% Mandatorily Exchangeable Senior Redeemable Preferred Stock of
PanAmSat.
"Closing Date" means the closing date of the Merger.
"Consolidated Adjusted Net Worth" means, as of the date of
determination thereof, the consolidated stockholders equity of Borrower in
accordance with GAAP plus the principal balance of the Loan outstanding as of
such date.
"Adjusted Consolidated Tangible Net Worth" means, at any date of
determination, Consolidated Adjusted Net Worth less the consolidated goodwill
----
of Borrower and its Subsidiaries, determined in accordance with GAAP.
"Debt Rating" means the rating by S&P or Moody's of senior unsecured
long-term debt issued by Borrower, as publicly announced and in effect from time
to time; provided, however, that if both S&P and Moody's announce a Debt Rating,
the lower rating shall be considered the Debt Rating.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended from time to time.
"Event of Default" means any event specified in Section 8.1.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Guaranty" has the meaning set forth in Section 4.1(d).
2
<PAGE>
"Indentures" means, collectively (a) the Indenture dated as of
August 5, 1993 among PanAmSat, PanAmSat Capital Corporation and First Trust
National Association relating to the Senior Secured Notes, (b) the Indenture
dated as of August 5, 1993 among PanAmSat, PanAmSat Capital Corporation and
United States Trust Company of New York relating to the Senior Subordinated
Discount Notes and (c) the indenture to be entered into by PanAmSat Corporation
in connection with the exchange of its 12 3/4% Mandatorily Exchangeable Senior
Redeemable Preferred Stock as contemplated by the Certificate of Designation, as
each of the foregoing may be amended, supplemented or otherwise modified from
time to time.
"Interest Payment Date" means the last day of any Interest Period. If any
Interest Payment Date is not a Business Day, then the relevant Interest Payment
Date shall be the next succeeding Business Day.
"Interest Period" means the period of time during which a particular LIBOR
Rate will be applicable to the principal balance of the Loan, and shall be a
period of one, two, three or six months as selected by Borrower in accordance
with Section 2.2, subject to the following:
(a) If the term of an Interest Period is not designated, a period of one
month shall be deemed selected; and
(b) The first Interest Period for the Loan shall have a duration of six
months commencing on the Closing Date.
"Investment Grade" means a Debt Rating by S&P of BBB- or better or a Debt
Rating by Moody's of Baa3 or better.
"Lender" has the meaning set forth in the preamble to this Agreement.
"LIBOR Rate" means for each Interest Period a rate per annum equal to two
percent (2.00% or 200 basis points) plus the Base LIBOR Rate applicable to such
Interest Period.
"Lien" means any trust deed, mortgage, pledge, hypothecation, assignment,
security interest, lien, charge or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the lien of an attachment, judgment or
execution, or any conditional sale or other title retention agreement, any
capitalized lease, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction, but excluding financing statements filed to give notice of
operating leases in the ordinary course of business and excluding financing
statements filed against the Borrower without the Borrower's consent or
knowledge).
"Loan" means the loan described in Section 2.
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<PAGE>
"Material Change" means any adverse change in the Borrower's financial
condition, operations or prospects which could reasonably be expected to
materially impair Borrower's ability to timely and fully perform its obligations
under this Agreement.
"Maturity Date" means May 1, 2000.
"Merger" means the series of transactions resulting in Borrower's direct or
indirect ownership of all of the outstanding common shares of PanAmSat as
contemplated by the Reorganization Agreement.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as defined
in Section 4001 (a) (3) of ERISA, which is subject to Title IV of ERISA, and to
which such Person or any of its ERISA Affiliates is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the sale or issuance by any Person of any
indebtedness or capital stock or other equity interest, any securities
convertible into or exchangeable for any capital stock or other equity interest
or any warrants, rights or options to acquire any capital stock or other equity
interest, the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction after deducting
therefrom (a) brokerage commissions, underwriting fees and discounts, legal fees
and expenses, finder's fees, accountants' fees and expenses and other similar
fees, expenses and commissions, (b) the amount of taxes payable or estimated in
good faith to be payable in connection with or as a result of such transaction
and (c) the amount of any indebtedness that, by the terms of such transaction or
the terms of such indebtedness, is required to be repaid upon such disposition.
"Note" has the meaning set forth in Section 2.1.
"PanAmSat" has the meaning set forth in the recitals to this Agreement.
"Permitted Liens" means (a) Liens securing the Senior Secured Notes, (b)
Liens to secure the performance of statutory obligations, surety or appeal bonds
or performance bonds, or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's or other like Liens, in any case incurred in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate process of law, if a reserve or
other appropriate provision, if any, as is required by GAAP shall have been made
therefore, (c) Liens against the assets of PanAmSat or the Galaxy Assets (as
defined in the Reorganization Agreement) existing on the date of this Agreement,
(d) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded so long as reserves
4
<PAGE>
or other appropriate provision shall have been made in conformity with GAAP, (d)
Liens permitted under the Indentures and the Certificate of Designation, (e)
easements, rights-of-way, land marking and zoning restrictions, royalties,
leasehold and fee interest covenants and other similar encumbrances incurred or
imposed in the ordinary course of business, and (f) extensions, renewals or
refinancings of any Liens referred to in clauses (a) through (e) above, provided
that any such extension, renewal or refinancing does not extend to any assets or
secure any indebtedness not securing or secured by the Liens being extended,
renewed or refinanced.
"Person" means any individual, firm, company, corporation, joint venture,
joint-stock company, limited liability company, trust, unincorporated
organization, governmental or state entity, or any association or partnership
(whether or not having separate legal personality) of two or more of the
foregoing.
"Plan" means any employee benefit pension plan (other than a Multiemployer
Plan) which is subject to the provisions of Title IV of ERISA and which is
maintained for employees of Borrower or any Subsidiary.
"Principal Repayment Date" means August 1, 1998, and the first day of each
November, February, May and August thereafter, until the Maturity Date.
"Reorganization" means the transactions contemplated by the Reorganization
Agreement and the Univisa Contribution Agreement.
"Reorganization Agreement" means an Agreement and Plan of Reorganization
dated as of September 20, 1996, as amended on April 4, 1997 that relates to the
combination of PanAmSat and the existing commercial satellite business of Hughes
Communications, Inc. and certain of its subsidiaries.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder excluding those events for which the 30-day
notice requirement is waived, a withdrawal from a Plan described in Section 4063
of ERISA, or a cessation of operations described in Section 4062(e) of ERISA.
"Restricted Subsidiaries" means each Subsidiary having assets of Five
Million Dollars ($5,000,000.00) or more.
"S&P" means Standard & Poor's Ratings Group.
"Senior Secured Notes" means the 9 3/4% Senior Secured Notes Due 2003
issued by PanAmSat and PanAmSat Capital Corporation.
"Senior Subordinated Discounts Notes" means the 11 3/8% Senior Subordinated
Discount Notes Due 2003 issued by PanAmSat and PanAmSat Capital Corporation.
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<PAGE>
"Subsidiaries" (individually a "Subsidiary") means those corporations or
entities of which Borrower or any Subsidiary owns more than fifty percent (50%)
of the voting securities. If Borrower or any Subsidiary (i) acquires similar
ownership of any other corporation or entity, such corporation or entity shall
thereupon be deemed a Subsidiary for all purposes hereof, or (ii) subject to the
terms hereof, permits its ownership to fall to fifty percent (50%) or below of
outstanding voting shares of any Subsidiary, such Subsidiary shall thereupon
cease to be a Subsidiary for all purposes hereof.
"Univisa Contribution Agreement" means the Stock Contribution and Exchange
Agreement dated as of September 20, 1996 among Grupo Televisa, S.A., a Mexican
corporation, Satellite Company, L.L.C., a Nevada limited liability company,
Borrower and Hughes Communications, Inc.
"Unmatured Event of Default" means an event which the passage of time or
the giving of notice, or both, would become an Event of Default.
"Voting Stock" means capital stock of Borrower having voting power under
ordinary circumstances to elect directors of Borrower.
SECTION 2
THE LOAN
2.1 The Loan. Lender agrees to make and Borrower agrees to take on the
--------
Closing Date, subject to the terms and conditions of this Agreement, a loan in
the principal amount of ONE BILLION SEVEN HUNDRED TWENTY FIVE MILLION DOLLARS
($1,725,000,000) bearing interest at the rate specified in Section 2.2 below.
The Loan shall be evidenced by a promissory note (the "Note") duly executed by
Borrower in the form attached as Exhibit A, and delivered to Lender.
2.2 Interest. The principal balance of the Loan outstanding from time to
--------
time during each Interest Period shall bear interest at an annual rate equal to
the LIBOR Rate in effect for each such Interest Period. The length of each
Interest Period shall be determined by Borrower by providing to Lender written
notice of Borrower's selection thereof not less than three Business Days prior
to each Interest Payment Date. Each determination of the LIBOR Rate and the Base
LIBOR Rate applicable to a particular Interest Period shall be made by Lender
and shall be conclusive and binding upon Borrower absent manifest error.
Interest at the applicable LIBOR Rate from time to time shall be calculated for
the actual number of days elapsed on the basis of a 360 day year.
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<PAGE>
2.3 Payments. Each payment of principal, interest and other sums payable
--------
under this Agreement shall be made in immediately available funds to Lender at
The Bank of America, Concord, California or such other location as Lender may
designate in writing. Each payment by Borrower shall be made without set off or
counterclaim and not later than 11:00 a.m. California time on the day such
payment is due and shall be made by wire transfer in immediately available
funds. All sums received after such time shall be deemed received on the next
Business Day.
(a) Interest Payments. Payments of interest determined in accordance with
-----------------
Section 2.2 above shall be due on each Interest Payment Date;
provided, however that during any six month Interest Period, an
additional interest payment shall be due on the last business day of
the third month of such Interest Period.
(b) Principal Repayments. Quarterly principal payments of Fifty Million
--------------------
Dollars ($50,000,000.00) each shall be paid on each Principal
Repayment Date.
(c) Maturity Date. All unpaid principal, interest and other amounts due
-------------
hereunder shall be fully and finally due and payable on the Maturity
Date.
2.4 Default Rate. Upon the occurrence of an Event of Default and for the
------------
period during which any such Event of Default continues uncured, the outstanding
principal amount of the Loan shall bear interest at an annual rate equal to the
LIBOR Rate plus two percent (2.00% or 200 basis points).
2.5 Facility Fee. On the Closing Date, Borrower shall pay Lender a
------------
facility fee equal to one percent (1.00% or 100 basis points) of the principal
amount of the Loan.
2.6 Renegotiation of Interest Rate. In the event that (a) Borrower shall
------------------------------
attain an Investment Grade Debt Rating; or (b) Borrower's Subsidiary, PanAmSat,
ceases to be subject to dividend payment restrictions and restrictions on
pledges of assets contained in the Indentures and the Certificate of
Designation, Lender and Borrower agree to negotiate in good faith regarding an
appropriate revision to the rate of interest charged under this Agreement.
Notwithstanding the foregoing, absent a written revision executed by Lender and
Borrower, no modification to the interest rate shall occur and no agreement to
do so is implied hereby.
2.7 Compliance with Law. All agreements between Lender and Borrower,
-------------------
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand or
acceleration of the maturity hereof or otherwise, shall the interest contracted
for, charged, received, paid or agreed to be paid to Lender exceed the maximum
contractual rate permitted under applicable law; and if from any circumstance
Lender hereof shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal of the Loan and if
said amount exceeds the unpaid balance of principal, such excess shall be
refunded to the Borrower. All interest paid or agreed to be paid to Lender
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<PAGE>
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal so that the interest hereon for such full period shall not exceed the
maximum amount permitted by applicable law.
SECTION 3
PREPAYMENT
3.1 Voluntary Prepayment. Borrower may prepay the Loan in full or in part
--------------------
but any such partial prepayment shall be in an amount of at least Fifty Million
Dollars ($50,000,000.00). Borrower shall provide Lender with a written notice of
prepayment at least three Business Days prior to prepayment. Notice of
prepayment shall specify the date of the prepayment and the amount of the
prepayment. Each such prepayment shall be made on the date specified and shall
be accompanied by the payment of accrued interest on the amount prepaid. Subject
to compliance with the foregoing procedures, the Loan may be prepaid at any time
without penalty of any kind; provided that if the Borrower prepays all or any
--------
portion of the principal amount of the Loan other than on an Interest Payment
Date, the Borrower shall, within ten (10) days after demand by Lender pay to the
Lender any amounts required to compensate the Lender for any additional losses,
costs or expenses which it reasonably incurred as a result of such prepayment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund the Loan; and, Lender's determination of such losses, costs or
expenses shall be binding and conclusive absent manifest error. Prepayments
shall be applied to scheduled principal payments in order of maturity.
3.2 Mandatory Prepayment. Except as restricted or as otherwise required
--------------------
by the Indentures or the Certificate of Designation, in addition to the
scheduled principal payments provided in Section 2.3 above, the following
amounts shall be paid to Lender and shall be applied to prepay outstanding
principal amount of the Loan:
(a) all Net Cash Proceeds of the sale or issuance of equity by the
Borrower or any Restricted Subsidiary (excepting any issuance of
equity pursuant to a Plan or any other employee benefit plan);
(b) all Net Cash Proceeds of any new borrowings by the Borrower or any
Restricted Subsidiary in excess of Five Million Dollars
($5,000,000.00);
(c) all Net Cash Proceeds of the sale or other disposition by Borrower or
any Restricted Subsidiary of any assets having an aggregate fair
market value in excess of Ten Million Dollars ($10,000,000.00) which
proceeds are not reinvested or committed to reinvestment by the
Borrower or any Restricted Subsidiary in productive assets used or
usable in the business of the Borrower or any Restricted Subsidiary
within 180 days after receipt thereof; or
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(d) all insurance proceeds including, without limitation, any in-orbit and
launch insurance proceeds in excess of Five Million Dollars
($5,000,000.00), which are not reinvested or committed to reinvestment
by the Borrower or any Restricted Subsidiary in productive assets used
or usable in the business of the Borrower or any Restricted Subsidiary
within 180 days after receipt thereof.
Any mandatory prepayment shall be applied to scheduled principal payments in
reverse order of maturity. Notwithstanding the foregoing, the provisions of
Section 3.2(c) above shall not apply to the sale or other disposition of assets
(i) by the Borrower to a Restricted Subsidiary, (ii) by a Restricted Subsidiary
to the Borrower or (iii) by a Restricted Subsidiary to another Restricted
Subsidiary. In addition to the foregoing, in the event that any sale, spin-off,
disposition or other transaction whereby Hughes Electronics Corporation will no
longer beneficially own directly or indirectly at least fifty one percent (51%)
of the Voting Stock shall have occurred, then the Loan and all accrued interest
thereon and all other liabilities and obligations outstanding under this
Agreement shall, thereupon, without presentment, demand, protest, or notice of
any kind, all of which are hereby expressly waived, be forthwith due and
payable, if not otherwise then due and payable, together with all reasonable
costs and expenses (including breakage and funding costs and other costs in
connection with the relending, reborrowing, funding or other employing of funds)
incurred by the Lender as a result thereof, anything herein or in any other
agreement, contract, indenture, document or instrument contained to the contrary
notwithstanding. In the event that any such sale, spin-off, disposition or other
transaction occurs whereby Hughes Electronics Corporation no longer beneficially
owns directly or indirectly at least fifty-one percent (51%) of the Voting
Stock, Borrower shall receive a refund of a portion of the facility fee paid in
accordance with Section 2.5 above, in an amount determined on a prorata basis as
of the date of such prepayment by dividing the remaining number of full months
in the original loan term by the number of full months in the original loan
term, and multiplying the quotient thereof by the amount
of said facility fee.
SECTION 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent. The obligation of Lender to make the Loan
--------------------
hereunder is subject to the condition that there shall have been delivered to
Lender on or prior to the Closing Date, in form and substance reasonably
satisfactory to Lender:
(a) the Note, and such other documents as Lender may reasonably request,
duly executed by Borrower.
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(b) Certificate of the Secretary or an Assistant Secretary of Borrower
dated the date hereof as to (i) the Certificate of Incorporation
and the By-laws of Borrower, (ii) the resolution of the Board of
Directors of Borrower or its Executive Committee in connection
with this Agreement, and (iii) the incumbency and signatures of the
person(s) authorized to execute and deliver this Agreement and any
other instrument, document or other agreement required hereunder.
(c) Certificate of Good Standing in relation to Borrower issued by the
Secretary of the State of Delaware, dated not more than one month
prior to the Closing Date.
(d) Lender shall receive from each Restricted Subsidiary, an
unconditional guaranty of the Loan in the form attached as Exhibit
B (a "Guaranty"); provided, however, that in the event any
Restricted Subsidiary is precluded from executing such a Guaranty
on the Closing Date by the terms of the Indentures or the
Certificate of Designation or any other legally binding agreement,
receipt of an executed Guaranty from any such Restricted Subsidiary
shall not be required as a condition precedent to making the Loan.
At such time as any such restriction is eliminated, the affected
Restricted Subsidiary shall promptly execute and deliver a Guaranty
to Lender.
SECTION 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that as of the Effective Date:
5.1 Authority of Borrower. Borrower (a) is a corporation duly organized
---------------------
and existing under the laws of the State of Delaware, with its principal place
of business in Greenwich, Connecticut, (b) has the corporate power to own its
property and carry on its business as now being conducted, (c) is duly qualified
and authorized to do business, and is in good standing in every state, country
or other jurisdiction except where the failure to be so qualified, authorized
and in good standing would not have a material adverse effect on Borrower's
financial condition, operations or prospects, (d) has full power and authority
to borrow the sums provided for in this Agreement, to execute, deliver and
perform this Agreement and any instrument or agreement required hereunder, and
to perform and observe the terms and provisions hereof and thereof, (e) has
taken all corporate action on the part of Borrower, its directors or
stockholders, necessary for the authorization, execution, delivery and
performance of this Agreement, and any instrument or agreement required
hereunder on the date hereof, (f) requires no consent or approval of any trustee
or holder of any indebtedness or obligation of Borrower to enter into, deliver
or perform its obligations under this Agreement and the Note, and (g) requires
no consent, permission, authorization, order or license of any governmental
authority in connection with the execution and delivery and performance of this
Agreement and any instrument or agreement required hereunder, or any transaction
contemplated hereby, except as may have been obtained and certified copies of
which have been delivered to Lender.
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5.2 Binding Obligations. This Agreement and the Note are the legal, valid
-------------------
and binding obligations of Borrower, enforceable against it in accordance with
its terms.
5.3 Incorporation of Restricted Subsidiaries. Each Restricted Subsidiary
----------------------------------------
of Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and, to the
best of Borrower's knowledge, is duly licensed or qualified as a foreign
corporation in all jurisdictions except where the failure to be so qualified,
authorized and in good standing would not have a material adverse effect on
Borrower's and its Restricted Subsidiaries' financial condition, operation and
prospects taken as a whole.
5.4 No Contravention. There is no charter, by-law, or capital stock
----------------
provision of Borrower and no provision of any material indenture or agreement,
written or oral, to which Borrower is a party or under which Borrower is
obligated, nor is there any material statute, rule or regulation, or any
judgment, decree or order of any court or agency binding on Borrower which would
be contravened by the execution, delivery and performance of this Agreement, or
any instrument or agreement required hereunder, or by the performance of any
provision, condition, covenant or other term hereof or thereof.
5.5 Notices. No event has occurred which would require Borrower to notify
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Lender pursuant to Section 6.2 hereof.
5.6 Financial Statements. All financial statements furnished by Borrower
--------------------
to Lender present fairly the financial position and results of operation and
changes in financial position of Borrower and its Restricted Subsidiaries as at
the end of, and for the periods to which such statements relate, and such
financial statements have been prepared in accordance with GAAP.
5.7 ERISA. Based upon ERISA and the regulations and published
-----
interpretations thereunder, the Plans of Borrower and its Restricted
Subsidiaries are in material and substantial compliance in all material respects
with the applicable provisions of ERISA and Borrower and its Subsidiaries are in
compliance with such Plans in all material respects. No Reportable Event which
has or could be reasonably be expected to result in termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan has occurred
and is continuing with respect to any Plan.
5.8 [Intentionally Deleted].
5.9 Insurance. Borrower and its Restricted Subsidiaries maintain insurance
---------
with responsible insurance companies, in such amounts and against such risks as
is customarily carried by owners of similar businesses and property in similar
locations, including protection against loss of use and occupancy, to the extent
such insurance is reasonably available at commercially reasonable rates, and it
will furnish Lender, within five Business Days after receipt of a written
request, with full information as to the insurance carrier.
11
<PAGE>
SECTION 6
AFFIRMATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of all
indebtedness incurred hereunder, unless Lender waives compliance in writing:
6.1 Management of Business. It will manage its business and conduct its
----------------------
affairs such that the representations and warranties contained in Section 5
remain true and correct at all times.
6.2 Notice of Certain Events. It will, and it will cause each of its
------------------------
Restricted Subsidiaries to, give prompt written notice to Lender of:
(a) all Events of Default or Unmatured Events of Default;
(b) any event of default under the Indentures, the Certificate of
Designation and any other existing or future agreement, contract,
indenture, document or instrument entered into by it that could, if
settled unfavorably, result in a Material Change;
(c) all litigation, arbitration or administrative proceedings involving
Borrower or any of its Subsidiaries which could in the reasonable
opinion of Borrower be expected to result in a Material Change;
(d) any other matter which has resulted in, or might in the reasonable
opinion of Borrower result in, a Material Change.
6.3 Records. It will, and it will cause each of its Restricted
-------
Subsidiaries to, keep and maintain proper books of record and account, in which
full and accurate entries shall be made of all financial transactions and the
assets of the Borrower and each Restricted Subsidiary to the extent necessary to
permit preparation of the financial statements required to be delivered hereby.
Borrower will permit Lender, and its designated officers, employees, agents and
representatives, to have access thereto and to make examination thereof during
normal business hours and after reasonable notice, to make audits, and to
inspect and otherwise check its properties, real, personal and mixed.
6.4 Financial Information. It will furnish to Lender:
---------------------
(a) Within 30 days after the close of each quarter, except for the last
quarter of each fiscal year, its consolidated balance sheet as of the
close of such quarter and its consolidated profit and loss statement
and cash flow statement for that quarter and for that portion of the
fiscal year ending with such quarter, all prepared in accordance with
GAAP, and all certified by its Treasurer or an Assistant Treasurer as
presenting fairly the financial position and results of operation and
changes in financial position of Borrower and its consolidated
Subsidiaries as at the end of,
12
<PAGE>
and for the fiscal period to which such statements relate,
subject to normal year-end adjustments and the absence of
footnotes.
(b) Within 90 days after the close of each fiscal year, a complete
copy of its annual financial statements, which statements shall
include at least its consolidated balance sheet as of the close
of such fiscal year and its consolidated profit and loss
statement and cash flow statement for such fiscal year, prepared
in accordance with GAAP applied on a basis consistent with that
of the previous year, by such independent certified public
accountants of recognized national standing as may be selected
by Borrower and which statements shall include the opinion of
such accountants, such opinion not to be qualified or limited
because of any restricted or limited nature of examination made
by such accountants or because of a "going concern"
qualification.
(c) Such other information concerning its affairs as Lender may
reasonably request.
6.5 Execution of Other Documents. It will promptly, upon demand by
----------------------------
Lender, execute all such additional agreements, documents and instruments to
evidence Borrower's obligations hereunder as Lender may reasonably deem
necessary.
6.6 Compliance with Law. It will, and will cause each of its
-------------------
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations, and orders of any governmental or regulatory authority, a breach of
which would result in a Material Change, except where contested in good faith by
appropriate proceedings diligently pursued.
6.7 Subsidiary Guaranties. It will, upon elimination of any
---------------------
restriction excusing the delivery of a Guaranty by a Restricted Subsidiary as a
condition precedent to Closing in accordance with Section 4.1(d) above, cause
the affected Restricted Subsidiary to promptly execute and delivery to Lender a
Guaranty.
6.8 Taxes. Borrower shall file (or caused to be filed) all federal
-----
and state tax returns which are required to be filed, and shall pay prior to
delinquency all taxes that become due pursuant to said returns or pursuant to
any assessment, except as are being contested in good faith by appropriate
proceedings and as to which adequate reserves are provided on the books of
Borrower in accordance with GAAP.
SECTION 7
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of
all indebtedness incurred hereunder, unless Lender waives compliance in writing;
<PAGE>
7.1 Liens. Borrower will not, nor will it permit any Restricted Subsidiary
-----
to, issue, incur, guaranty or assume any indebtedness for money borrowed
secured by a Lien upon any property or assets of Borrower or any Restricted
Subsidiary or upon any shares of stock or indebtedness of any Restricted
Subsidiary (whether such property, assets, shares of stock or indebtedness are
now owned or hereafter acquired) except for:
(a) Liens on property existing at the time of acquisition of such property
by Borrower or a Restricted Subsidiary, or Liens to secure the payment
of all or any part of the purchase price of property upon the
acquisition of such property by Borrower or a Restricted Subsidiary or
to secure any indebtedness incurred or guaranteed prior to, at the
time of, or within 180 days after, the later of the date of
acquisition of such property and the date such property is placed in
service, for the purpose of financing all or any part of the purchase
price thereof, or Liens to secure any indebtedness incurred or
guaranteed for the purpose of financing the cost to Borrower or a
Restricted Subsidiary of improvements to such acquired property;
(b) Liens on property of Borrower or a Restricted Subsidiary in favor of
the United States of America or any state thereof, or any department,
agency or instrumentality of political subdivision of the United
States of America or any state thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or
statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens;
(c) Permitted Liens
(d) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Liens referred to
in the foregoing subsections (a) through (c), inclusively; provided,
however, that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so secured at
the time of the incurrence or guarantee thereof and that such
extension, renewal or replacement shall be limited to all or a part of
the property which secured the Lien so extended, renewed or replaced
(plus improvements on such property).
7.2 Adjusted Consolidated Tangible Net Worth. Borrower shall not permit
----------------------------------------
its Adjusted Consolidated Tangible Net Worth at any time during any fiscal
quarter to be less than One Billion Two Hundred Seventy Five Million Dollars
($1,275,000,000.00) plus seventy five percent (75%) of each of the total for all
----
fiscal years during the terms of the Loan, fiscal year's consolidated net
income, commencing with the fiscal year beginning January 1, 1998.
14
<PAGE>
7.3 Restrictions on Liens. Except for, and as permitted or contemplated
---------------------
by, any of the Indentures, the Certificate of Designation or any other
agreement to which the Borrower or any of its Restricted Subsidiaries is a party
as of the date hereof, including any renewal, extensions or refinancings
thereof, Borrower will not, nor will it permit any Restricted Subsidiary to,
enter into any agreement of any nature with any Person which agreement contains
any provisions which either:
(a) prohibits a Lien upon any property or assets of Borrower or any
Restricted Subsidiary or upon any shares of stock or indebtedness of
any Restricted Subsidiary (whether such property, assets, shares of
stock or indebtedness are now owned or hereafter acquired), provided
that this paragraph (a) shall not apply to Permitted Liens; or
(b) prohibits or restricts in any way the ability of Borrower or any
Restricted Subsidiary to declare and pay dividends or to otherwise
effect transfers of cash or assets to affiliates of such entities.
7.4 Restrictions on Borrowings. Except for, and as permitted or
--------------------------
contemplated by, any of the Indentures, the Certificate of Designation or any
other agreement to which the Borrower or any of its Restricted Subsidiaries is a
party as of the date hereof, including any renewal, extensions or refinancings
thereof, absent the prior written consent of Lender, Borrower will not, nor will
it permit any Restricted Subsidiary to, enter into any loan, credit agreement,
indenture or other form of debt instrument pursuant to which the principal
indebtedness would exceed Five Million Dollars (5,000,000.00) or which, if
consummated, would result in total outstanding principal indebtedness of
Borrower and its Restricted Subsidiaries (exclusive of the Loan) in excess of
Ten Million Dollars ($10,000,000.00).
SECTION 7A
NON-CONTRAVENTION OF INDENTURES
AND CERTIFICATE OF DESIGNATION
Notwithstanding anything herein to the contrary, the parties hereto agree
that (a) neither the Borrower nor any of its subsidiaries shall be obligated to
take any action or refrain from taking any action hereunder if the taking of
such action or the refraining from taking such action would be contrary to any
provision set forth in any of the Indentures or in the Certificate of
Designation and (b) neither the Borrower nor any of its Subsidiaries shall be
prohibited by the terms hereof from taking any action that it is permitted to
take under any of the Indentures or the Certificate of Designation. Any action
taken by the Borrower or any of its Subsidiaries which may be restricted
hereunder but is otherwise permitted under any of the Indentures or the
Certificate of Designation shall not constitute any Unmatured Event of Default
or an Event of Default.
15
<PAGE>
SECTION 8
EVENTS OF DEFAULT
8.1 Events of Default. If one or more of the following described Events
-----------------
of Default shall occur:
(a) Borrower shall fail to pay any principal amount due on the Loan when
due;
(b) Borrower shall fail to pay any interest on the Loan or other amounts
due hereunder (other than principal on the Loan) within two Business
Days after such payment is due;
(c) Subject to Section 7A above, Borrower or any its Restricted
Subsidiaries shall fail to perform or observe any of the terms,
provisions, covenants, conditions, agreements or obligations
contained herein or in any other agreement or instrument contemplated
hereby and such failure shall continue for more than thirty days
after written notice from Lender of the existence and character of
such failure to perform or observe;
(d) (i) Borrower, or any of its Restricted Subsidiaries shall become
insolvent, or shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally as they become due; or (ii) Borrower or any Restricted
Subsidiary shall make a general assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial
amount of its properties or assets; or (iii) Borrower or any
Restricted Subsidiary shall file or have filed against it a petition
in bankruptcy or seeking reorganization or to effect a plan or other
arrangement with creditors or winding up or dissolution and such
filing against it shall not be dismissed within 60 days after the
date of such filing; or (iv) Borrower or any Restricted Subsidiary
shall apply for or consent to the appointment of or consent that an
order be made appointing any receiver or trustee shall be appointed
for all or a substantial part of its or their properties, assets or
business; or (v) an order for relief shall be entered against
Borrower or any Restricted Subsidiary under the United States federal
bankruptcy laws as now or hereafter in effect; or (vi) Borrower or
any Restricted Subsidiary shall take any action indicating its
consent to, approval of or acquiescence in, any of the foregoing; or
(e) Any final judgment, decrees, writs of execution, attachments or
garnishments or any Liens, or any other legal processes shall be
issued or levied against any of the assets or property of Borrower or
any of its Restricted Subsidiaries (and shall not have been vacated,
discharged or stayed for 30 consecutive days) in amounts which in the
aggregate would result in a Material Change; provided, however, that
16
<PAGE>
such aggregate amount shall include only amounts in excess of (i)
insurance coverage therefor and (ii) reserves on the books of Borrower
or any of its Restricted Subsidiaries therefore; provided, further,
that such aggregate amount shall not include any amounts with respect
to matters subject to appeal conducted in good faith and diligently
pursued or other further legal process by Borrower or any of its
Restricted Subsidiaries or any amounts with respect to any such legal
process which Borrower or any of its Restricted Subsidiaries has
detached from such property by posting of a bond or equivalent
process; or
(f) All, or substantially all, of the assets and property of Borrower or
any of its Restricted Subsidiaries shall be condemned, seized or
otherwise appropriated; or
(g) Borrower or any of its Restricted Subsidiaries (i) fails to make any
payment (or otherwise satisfy) in respect of any indebtedness for
money borrowed when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any,
specified in the document relating thereto; or (ii) any other event or
condition shall exist under the agreements or documents relating to
such indebtedness which continues beyond the applicable grace or
notice period, if any, and the occurrence thereof permits the
acceleration of such indebtedness which failure or event of default
has not been waived or cured; provided, however, that no Event of
Default shall exist hereunder if the total principal amount of the
individual obligation which is in default or which may be accelerated
does not exceed Ten Million Dollars ($10,000,000.00);
then in such event, Lender in its sole discretion and without notice to
Borrower, shall have the right to declare the entire principal balance of the
Loan immediately due and payable, together with all interest and other amounts
due under this Agreement; to make immediate demand for such payment; and to
exercise all of its rights and seek all remedies available to it pursuant to
this Agreement or provided by law.
8.2 Recovery of Amounts Due. If any amount payable hereunder is not paid
-----------------------
as and when due, Borrower hereby authorizes Lender the fullest extent permitted
by applicable law, without prior notice, by right of set-off or counterclaim,
against any moneys or other assets of Borrower in any currency that may at any
time be in the possession of Lender or any of its affiliates to the full extent
of all amounts payable to Lender hereunder.
8.3 Rights Cumulative. The rights of Lender provided for herein are
-----------------
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity.
17
<PAGE>
SECTION 9
MISCELLANEOUS PROVISIONS
9.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement, and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
Lender and Borrower and then any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
9.2 Notices. All notices, payments, requests, reports, information,
-------
demands and other communications which any party hereto may desire, or may be
required, to give or make to any other party hereto, shall (unless otherwise
permitted as a telephonic notice or request hereunder) be given by mailing the
same, postage prepaid, or by telecopier transmission, or by hand delivery or
courier, to each party at its address set forth in Exhibit C attached hereto and
incorporated herein by reference, or to such other address as may, from time to
time, be specified in writing by Borrower or Lender. Such communications shall
be deemed to have been duly given and received in the case of a telecopy
transmission, when the telecopy transmission is sent, in the case of mail when
sent by pre-paid certified or registered mail correctly addressed to the
addressee, in the case of hand delivery or courier, when received. Each party
hereto shall promptly confirm by telecopy transmission any telephone
communication made by it to another pursuant to this Agreement but the absence
of such confirmation shall not affect the validity of such communication, which
shall be effective upon receipt. If there is any conflict between any telephonic
communication and a written confirmation, the written communication shall
govern, the recipient of such communication shall be held harmless by all
parties hereto with respect to any action taken in reliance on the telephonic
communication prior to the time such recipient receives and has had reasonable
time to review the subsequent written confirmation and initiate such corrective
action as the recipient deems reasonable under the circumstances.
9.3 Waiver. Neither the failure of, nor any delay on the part of, any
------
party hereto in exercising any right, power or privilege hereunder, or under any
agreement, contract, indenture, document or instrument mentioned herein, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder, or under any agreement, contract,
indenture, document or instrument mentioned herein, preclude other or further
exercise thereof or the exercise of any other right, power or privilege; nor
shall any waiver of any right, power, privilege or default hereunder, or under
any agreement, contract, indenture, document or instrument mentioned herein,
constitute a waiver of any other right, power, privilege or default or
constitute a waiver of any other default of the same or of any other term or
provision. All rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies otherwise provided by law.
18
<PAGE>
9.4 California Law. The interpretation, enforcement and effect of this
--------------
Agreement, the Note and any agreements, contracts, indentures, documents or
instruments delivered in accordance herewith, shall be governed and controlled
in all respects by and construed according to the substantive laws of the State
of California, to the jurisdiction of whose courts the parties hereto hereby
agree to submit.
9.5 Headings. The headings set forth herein are solely for the purpose
--------
of identification and shall not be construed as a part of the sections or
subsections which they head.
9.6 Accounting Terms. All accounting terms not otherwise defined herein
----------------
have the meaning assigned to them in accordance with GAAP, provided, however,
any act or condition in accordance herewith and permitted hereunder when taken,
created or occurring, shall not become a violation of any section of this
Agreement as a result of a subsequent change in GAAP.
9.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, and
all of said counterparts taken together shall constitute one and the same
instrument.
9.8 Singular: Plural. Whenever used herein, the singular number shall
----------------
include the plural, the plural the singular, and the use of any gender shall be
applicable to all genders.
9.9 Illegality. The illegality or unenforceability of any provision of
----------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.10 Assignments. This Agreement shall bind and inure to the benefit
-----------
of the parties hereto and their respective successors and assigns. Lender may
assign or transfer all or any part of its rights and obligations hereunder
without Borrower's consent. Borrower may not assign or transfer all or any part
of its rights and obligations hereunder, except with the prior written consent
of Lender.
9.11 Fees and Expenses. Borrower agrees to pay on demand (a) to Lender
-----------------
all reasonable costs, expenses and attorneys' fees (including allocated costs
for in-house legal services) incurred by Lender in connection with the
preparation and administration of this Agreement and any documents including any
amendments, waivers, or other modifications and (b) all reasonable costs,
expenses and attorneys' fees (including allocated costs for in-house legal
services) incurred by Lender in connection with the enforcement of this
Agreement and any instrument or agreement required hereunder and in connection
with any refinancing or restructuring of the Loan in the nature of a "work-out".
19
<PAGE>
9.12 Indemnity. Borrower agrees to indemnify Lender and its directors,
---------
officers, agents and employees from and hold each of them harmless against any
and all losses, liabilities, claims, damages or expenses reasonably incurred by
any of them arising out of or by reason of any investigation by governmental or
judicial authorities or being made a party to any litigation or other similar
proceeding related to any use made or proposed to be made by Borrower of the
proceeds of the Loan including, without limitation, the reasonable fees and
disbursements of counsel (including allocated costs for in-house legal services)
incurred in connection with any such investigation, litigation or other
proceeding. The obligations of Borrower under this Section shall survive the
termination of this Agreement.
Executed as of the date first hereinabove written.
HUGHES NETWORK SYSTEMS, INC. MAGELLAN INTERNATIONAL, INC.
(to be renamed "PANAMSAT CORPORATION")
By: ____________________ By: __________________________________
Printed Name: __________ Printed Name: Charles H. Noski
-------------------------
Title: _________________ Title: President
-------------------------------
20
<PAGE>
EXHIBIT "A"
-----------
PROMISSORY NOTE
---------------
$1,725,000,000.00 May ___, 1997
FOR VALUE RECEIVED, MAGELLAN INTERNATIONAL, INC., a Delaware corporation
("Maker") promises to pay to the order of HUGHES NETWORK SYSTEMS, INC., a
Delaware corporation ("Lender") at such place as the holder hereof may from
time to time designate in writing, the principal sum of One Billion Seven
Hundred Twenty-five Million Dollars ($1,725,000,000.00), together with interest
as hereinafter provided, in lawful money of the United States, which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in the manner hereinafter provided.
The principal outstanding under this Note form time to time shall bear
interest at the rate specified in that certain Loan Agreement ("Loan Agreement")
of even date herewith between Lender and Maker. In the event of any conflict
between this Note and the terms of said Loan Agreement, the terms of the Loan
Agreement shall control.
Interest shall accrue on the outstanding principal balance from the date
hereof up to but excluding the date of repayment of this Note.
Principal and interest due and owing hereunder shall be paid in accordance
with the terms of the Loan Agreement and all payments on this Note shall be
applied first to the payment of accrued interest, and then to the payment of
principal.
On the happening and during the continuance of an Event of Default (as
defined in the Loan Agreement), the holder may, at its option, declare
immediately due and payable the entire principal balance of this Note, together
with all unpaid interest accrued thereon, plus any other sums payable at the
time of such declaration pursuant to this Note or the Loan Agreement.
The failure to exercise the foregoing option upon the happening of one or
more Events of Default shall not constitute a waiver of the right to exercise
the same or any other option at any subsequent time in respect of payment
hereunder which is less than payment in full of all amounts due and payable at
the time of such payments, and shall not constitute a waiver of the right to
exercise the foregoing option at that time or at any subsequent time or nullify
any prior consent of the holder hereof, except as and to the extent otherwise
provided by law. Upon the occurrence and during the continuance of an Event of a
Default, the holder hereof may exercise any and all rights and remedies
available under contract or applicable law.
All agreements between the undersigned and the holder hereof, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no event, whether by reason of demand or acceleration of the maturity
hereof or otherwise, shall the interest contracted for, charged, received, paid
or agreed to be paid to the holder hereof exceed the maximum
-1-
<PAGE>
contractual rate permitted under applicable law; and if from any circumstance
the holder hereof shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive interest shall be applied to the reduction of the principal hereof and
if said amount exceeds the unpaid balance of principal hereof, such excess shall
be refunded to the undersigned. All interest paid or agreed to be paid to the
holder hereof shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the maximum amount permitted by applicable law. This paragraph shall
control all agreements between the undersigned and the holder hereof.
The undersigned waives diligence, presentment, protest and demand and also
notice of protest, demand, dishonor, acceleration, intent to accelerate, and
nonpayment of this Note, all without in any way affecting the liability of the
undersigned and any endorsers or guarantors hereof. No extension of time for the
payment of this Note, or any installment hereof, made by agreement by the
holder hereof with any person now or hereafter liable for the payment of this
Note, shall affect the original liability under this Note of the undersigned,
even if the undersigned is not a party to such agreement.
If this Note is not paid when due, whether at maturity or by acceleration,
or if it is collected through a bankruptcy, probate, or other court, whether
before or after maturity, Maker agrees to pay all costs of collection,
including, but not limited to, reasonable attorney's fees, incurred by the
holder hereof.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
MAGELLAN INTERNATIONAL, INC.
By:
------------------------------------
Printed Name:
--------------------------
Title:
---------------------------------
-2-
<PAGE>
EXHIBIT "B"
-----------
GUARANTY
--------
THE UNDERSIGNED, FOR VALUE RECEIVED, unconditionally and absolutely
guarantees to HUGHES NETWORK SYSTEMS, INC. (hereinafter called "Lender"), and to
the Lender's successors and assigns, as a primary obligation, the prompt and
complete payment and performance when due, whether by stated maturity, demand,
acceleration or otherwise, of all obligations to the Lender of MAGELLAN
INTERNATIONAL, INC., a Delaware corporation, and also of any debtor-in-
possession or trustee in bankruptcy which succeeds to the interests of said
party or persons (jointly and severally hereinafter called "Borrower"), pursuant
to a promissory note or notes made or to be made pursuant to that certain Loan
Agreement (hereafter called "Loan Agreement") between Lender and Borrower, said
note or notes being in the total principal amount of up to One Billion Seven
Hundred Twenty Five Million Dollars ($1,725,000,000.00), all of which is
hereinafter collectively called the "Indebtedness."
The undersigned waives notice of acceptance of this Guaranty and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of default and diligence in collecting any Indebtedness, and agrees that
the Lender may modify the terms of borrowing, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any part or all of any
Indebtedness, or permit the Borrower to incur additional Indebtedness, all
without notice to the undersigned and without affecting in any manner the
unconditional obligation of the undersigned under this Guaranty. The undersigned
further waives any and all other notices to which the undersigned might
otherwise be entitled. The undersigned acknowledges and agrees that the
liabilities created by this Guaranty are direct and are not conditioned upon
pursuit by the Lender of any remedy the Lender may have against the Borrower or
any other person or any security. No invalidity, irregularity or
unenforceability of any part or all of the Indebtedness or any documents
evidencing the same, by reason of any bankruptcy, insolvency or other law or
order of any kind or for any other reason, and no defense or setoff available at
any time to the Borrower, shall impair, affect or be a defense or setoff to the
obligations of the undersigned under this Guaranty.
The undersigned agrees that no security now or hereafter held by the Lender
for the payment of any Indebtedness, whether from the Borrower, any guarantor,
or otherwise, and whether in the nature of a security interest, pledge, lien,
assignment, setoff, suretyship, guaranty, indemnity, insurance or otherwise,
shall affect in any manner the unconditional obligation of the undersigned under
this Guaranty, and the Lender, in its sole discretion, without notice to the
undersigned, may release, exchange, enforce and otherwise deal with any such
security without affecting in any manner the unconditional obligation of the
undersigned under this Guaranty. The undersigned acknowledges and agrees that
the Lender has no obligation to acquire or perfect any lien on or security
interest in any asset or assets, whether realty or personalty, to secure payment
of the Indebtedness, and the undersigned is not relying upon assets in which the
Lender has or may have a lien or security interest for payment of the
Indebtedness.
<PAGE>
Until the Indebtedness is irrevocably paid in full, the undersigned
hereby waives any and all rights to be subrogated to the position of the Lender
or to have the benefit of any lien, security interest or other guaranty now or
hereafter held by the Lender for the Indebtedness or to enforce any remedy which
the Lender now has or hereafter may have against the Borrower or any other
person. Until the Indebtedness is irrevocably paid in full, the undersigned
shall have no right of reimbursement, indemnity, contribution or other right of
recourse to or with respect to the Borrower. The Lender shall have no duty to
enforce or protect any rights which the undersigned may have against the
Borrower, and the undersigned assumes full responsibility for enforcing and
protecting any such rights.
If after receipt of any payment of all or any part of the Indebtedness,
the Lender is for any reason compelled to surrender such payment to any person
or entity because such payment is determined to be void or voidable as a
preference, impermissible setoff, or diversion of trust funds or for any other
reason, then to the extent of that payment, the Indebtedness shall be revived
and the obligations under this Guaranty shall be continued in effect without
reduction or discharge for that payment, and this Guaranty shall continue in
full force notwithstanding any contrary action which may have been taken by the
Lender in reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Lender's rights under this Guaranty and shall
be deemed to have been conditioned upon such payment having become final and
irrevocable.
The undersigned waives any right to require the Lender to: (a) proceed
against any person, including the Borrower; (b) proceed against or exhaust any
security held from the Borrower or any other person; (c) pursue any other remedy
in the Lender's power; or (d) make any presentments or demands for performance,
or give any notices of nonperformance, protests, notices of protest or notices
of dishonor in connection with any obligations or evidences of Indebtedness held
by the Lender as security, in connection with any other obligations or evidences
of Indebtedness which constitutes in whole or in part the Indebtedness
guaranteed hereunder, or in connection with the creation of new or additional
Indebtedness.
The undersigned authorizes the Lender, either before or after
termination hereof, without notice to or demand on the undersigned and without
affecting the undersigned's liability hereunder, from time to time to: (a) apply
any security and direct the order or manner of sale thereof, as the Lender in
its discretion may determine; (b) release or substitute any one or more of the
endorsers or any other guarantors of the Indebtedness; and (c) apply payments
received by the Lender from the Borrower to any Indebtedness of the Borrower to
the Lender, in such order as the Lender shall determine in its sole discretion,
whether or not any such Indebtedness is covered by this Guaranty, and the
undersigned hereby waives any provision of law regarding application of payments
which specifies otherwise. The Lender may, without notice, assign this Guaranty
in whole or in part.
The undersigned waives any defense based upon or arising by reason of
(a) any disability or other defense of the Borrower or any other person; (b) the
cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the
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<PAGE>
Indebtedness; (c) any lack of authority of any officer, director, partner, agent
or any other person acting or purporting to act on behalf of the Borrower which
is a corporation, partnership or other type of entity, or any defect in the
formation of the Borrower; (d) the application by the Borrower of the proceeds
of any Indebtedness for purposes other than the purposes represented by the
Borrower to the Lender or intended or understood by the Lender or the
undersigned; (e) any act or omission by the Lender which directly or indirectly
results in or aids in the discharge of the Borrower or any Indebtedness by
operation of law or otherwise; or (f) any modification of the Indebtedness, in
any form whatsoever, including any modification made after effective
termination, and including without limitation the renewal, extension,
acceleration or other change in time for payment of the Indebtedness, or other
change in the terms of the Indebtedness or any part thereof, including
increase or decrease of the rate of interest thereon.
The total obligation under this Guaranty shall be One Billion Seven Hundred
Twenty Five Million Dollars ($1,725,000,000.00) plus all interest thereon and
all costs and expenses of any kind, including but not limited to reasonable
attorney fees, incurred by the Lender at any time for any reason in enforcing
any of the duties and obligations of the undersigned under this Guaranty or
otherwise incurred by the Lender in any way connected with this Guaranty, the
Indebtedness. All such costs and expenses shall be payable immediately by the
undersigned when incurred by the Lender, without demand, and until paid shall
bear interest at the hightest per annum rate applicable to any of the
Indebtedness, but not in excess of the maximum rate permitted by law. Any
reference in this Guaranty to attorney fees shall be deemed a reference to fees,
charges, costs and expenses of both in-house and outside counsel, whether or not
a suit or action is instituted, and to court costs if a suite or action is
instituted, and whether such attorney fees or court costs are incurred at the
trial court level, on appeal, in a bankruptcy or probate proceeding or
otherwise.
The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the obligation of the
undersigned under this Guaranty, and acknowledges that as of the date hereof no
such defense or setoff exits.
The undersigned warrants and agrees that each of the waivers set forth
above are made with the undersigned's full knowledge of its significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any of said waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the extent permitted by law.
This Guaranty constitutes the entire agreement of the undersigned and the
Lender with respect to the subject matter hereof. No waiver, consent,
modification or change of the terms of this Guaranty shall bind the undersigned
or the Lender unless in writing and signed by the waiving party or an authorized
officer of the waiving party, and then such waiver, consent, modification or
change shall be effective only in the specific instance and for the specific
purpose given. This Guaranty shall inure to the benefit of the Lender and its
successors and
-3-
<PAGE>
assigns. This Guaranty shall be binding on the undersigned and the
undersigned's heirs, legal representatives, successors and assigns including,
without limiting the generality of the foregoing, any debtor-in-possession or
trustee in bankruptcy for the undersigned. The undersigned has entered into
this Guaranty in good faith for the purpose of inducing the Lender to extend
credit or make other financial accommodations to the Borrower, and the
undersigned acknowledges that the terms hereof are reasonable. If any provision
of this Guaranty is unenforceable in whole or in part for any reason, the
remaining provisions shall continue to be effective. THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
As used herein, the singular shall be deemed to include plural, and vice
----
versa, as the context requires.
- -----
IN WITNESS WHEREOF the undersigned has signed this Guaranty on
____________________________.
HUGHES COMMUNICATIONS SERVICES, INC.
By: ________________________________
Printed Name: ______________________
Title: _____________________________
-4-
Exhibit 20
FOR IMMEDIATE RELEASE
FROM PANAMSAT
- --------------------------------------------------------------------------------
PANAMSAT COMPLETES MERGER
WITH HUGHES COMMUNICATIONS' GALAXY
New Company is World's Preeminent Commercial Provider of Global Satellite-Based
Telecommunications Services
GREENWICH, CONN., May 16, 1997 - PanAmSat Corporation and Hughes Communications,
Inc. (HCI) announced today that the merger between PanAmSat and the Galaxy(R)
Satellite Services business of HCI has been completed. The newly created
company, called PanAmSat Corporation, began its first day of operation after
final execution of the merger earlier today.
On May 19 the new company will list its common stock on the Nasdaq national
market, initially under the ticker SPOTD. The ticker will revert to SPOT after
30 days.
"Today marks a new beginning for PanAmSat as the world's premier commercial
satellite communications company, offering tremendous growth potential for its
customers, shareholders and employees," said Frederick A. Landman, PanAmSat's
president and chief executive officer. "In every aspect of our business, we will
continue to provide our customers with the very best and most advanced satellite
broadcasting, telecommunications and Internet services available anywhere in the
world."
Charles H. Noski, chairman of the board of directors of PanAmSat and vice
chairman and chief financial officer of Hughes Electronics Corporation, said:
"This merger represents the joining of two complementary businesses into a new
powerhouse for global satellite services. As the new majority shareholder,
Hughes Electronics believes PanAmSat will be an integral part of Hughes'
forward-looking strategy in telecommunications."
PanAmSat shareholders formally approved the merger on May 8. In addition, the
stock election process achieved the following results:
- - For the standard election, PanAmSat shareholders received $15 and one-half
share of new company stock for each share of former PanAmSat stock;
- - For the stock election, PanAmSat shareholders received one share of new
company stock for each share of former PanAmSat stock;
- - For the cash election, PanAmSat shareholders received approximately $16.38
and 0.45 shares of new company stock for each share of former PanAmSat
stock.
Fractional shares of new company stock resulting from the proration will be paid
in cash.
-- MORE --
<PAGE>
PanAmSat Corporation is the world's leading commercial provider of
satellite-based communications services. The Company operates a global network
of 14 state-of-the-art satellites supported by more than 400 professionals on
five continents. These resources enable PanAmSat to provide broadcast,
telecommunications and Internet access services to hundreds of customers
worldwide.
PanAmSat services include:
- - The premier cable and broadcast television satellites in the United States,
Latin America, the Indian subcontinent and Asia-Pacific;
- - Satellite platforms for direct-to-home television services in Latin America,
South Africa, the Middle East and India;
- - Live, on-the-scene transmission services for news, sports and special events
coverage worldwide;
- - Global satellite-based telecommunications and Internet access services.
PanAmSat plans to launch seven additional satellites by late 1998, including the
upcoming launch of the PAS-5 Atlantic Ocean Region satellite in July 1997. For
more information on the company and its services, visit the PanAmSat web site at
http://www.panamsat.com.
####
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Current Report on Form 8-K of our report dated January 27,
1997 accompanying the consolidated financial statements of PanAmSat Corporation
and subsidiaries and predecessor entity as of December 31, 1996 and 1995, and
for the years ended December 31, 1996, 1995 and 1994, included in or made a part
of the Registration Statement on Form S-4 (File No.333-25293) of PanAmSat
Corporation.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
May 30, 1997
