Exhibit 10.36
LEVERAGED LEASE GUARANTY INDEMNIFICATION AGREEMENT
This LEVERAGED LEASE GUARANTY INDEMNIFICATION AGREEMENT (this
"Agreement") is made as of the 16th day of May, 1997 by and between Magellan
International, Inc. ("Magellan") and Xxxxxx Electronics Corporation (formerly
known as XX Xxxxxx Electronics Corporation) ("HE").
RECITALS
X. Xxxxxx Communications Galaxy, Inc. ("HCG"), Xxxxxx Communications
Satellite Services, Inc. ("HCSS") and certain other indirect subsidiaries of HE
previously entered into arrangements whereby HCG sold the Galaxy VII, SBS 6 and
Galaxy III-R communications satellites to various parties and is leasing them
back from such parties pursuant to lease agreements related to such satellites
(the "Sale Leaseback Transactions").
B. As part of the Sale Leaseback Transactions, HE guaranteed certain
payment and performance obligations under the agreements relating to the Sale
Leaseback Transactions.
C. Under an Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated September 20, 1996, by and among Xxxxxx Communications, Inc.
("HCI"), HCG, HCSS, Xxxxxx Communications Services, Inc., Xxxxxx Communications
Carrier Services, Inc., Xxxxxx Communications Japan, Inc., PanAmSat Corporation
and Magellan International, Inc., HCI and certain of its subsidiaries agreed to
contribute to Magellan certain assets and obligations of the Galaxy Business (as
defined in the Reorganization Agreement), including all of their rights and
obligations in connection with the Sale Leaseback Transactions.
D. Pursuant to an Assurance Agreement entered into on even date with
the Reorganization Agreement, HE agreed to continue to guarantee the leveraged
leases of transponders in connection with the Sale Leaseback Transactions.
E. As a condition to consummation of the transactions contemplated by
the Reorganization Agreement, Magellan has agreed to enter into this Agreement.
AGREEMENT
In consideration of the foregoing and the mutual promises contained in
the Reorganization Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
INDEMNIFICATION
1.1 Indemnification.
(a) Magellan agrees to perform any obligation, commitment or
undertaking of HE (the "Indemnified Party") required by any third party arising
out of, resulting from or in connection with, any of the Sale Leaseback
Transactions, and Magellan further agrees to indemnify, defend and hold harmless
the Indemnified Party against any losses, claims, costs, expenses (including
reasonable legal expenses), damages or liabilities, joint or several, arising
out of, incurred as a result of or in connection with any such obligation,
commitment or undertaking.
(b) Promptly after an Indemnified Party becomes aware that a claim for
indemnification under this Section 1.1 has arisen, the Indemnified Party shall
notify Magellan in writing of such claim, accompanied by a written statement of
the facts of which the Indemnified Party then is aware constituting the basis
for such claim (in reasonable detail). Failure by any Indemnified Party to so
notify Magellan shall not relieve Magellan of any liability hereunder except to
the extent that such failure prejudices Magellan. The Indemnified Party shall
not pay or settle any claim that is the subject of indemnification during this
notice period without the prior written consent of Magellan.
(c) Within 30 days of receiving the notice required by Section 1.1(b)
Magellan may elect to pay, object to, compromise or defend such claim by
providing the Indemnified Party with written notice of such election, which
notice acknowledges Magellan's obligation to provide indemnification hereunder.
If Magellan so elects and if Magellan is financially capable (based on
Magellan's most recent financial statements) of satisfying when due the amount
to which the claim for indemnification relates, then (i) the Indemnified Party
shall not pay any third-party claim that is the subject of indemnification or
enter into any settlement or other compromise with respect to such claim without
the prior written consent of Magellan and (ii) Magellan shall have the right, in
its sole discretion, to take control of the settlement, defense, investigation
and any other actions with respect to such claim and to employ and engage
attorneys of its own choice reasonably acceptable to HE to handle and defend the
same, at Magellan's cost, risk and expense. Magellan shall not settle any
third-party claim that is the subject of indemnification without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld; provided, however, that Magellan may settle a claim without the
Indemnified Party's consent if such settlement (i) makes no admission or
acknowledgment of liability or culpability with respect to such Indemnified
Party, (ii) includes a complete release of the Indemnified Party and (iii) does
not require the Indemnified Party to make any payment or forego or take any
action. The Indemnified Party shall cooperate in all reasonable respects with
Magellan and its attorneys in the investigation, trial and defense of any
lawsuit or action with respect to such claim and any appeal arising therefrom
(including the filing in the Indemnified Party's name of appropriate
cross-claims and counterclaims), provided that Magellan shall pay all of HE's
out-of-pocket expenses of providing such cooperation. The Indemnified Party also
may participate in any investigation, trial and defense of such lawsuit or
action controlled by Magellan and any appeal arising therefrom; provided that,
if and to the extent that the Indemnified Party determines in its reasonable
judgment based on advice of legal counsel that an actual or potential material
conflict of interest exists where it is advisable for the Indemnified Party to
be represented by separate counsel and the Indemnified Party informs Magellan
that it desires to be represented by separate counsel, the Indemnified Party
shall have the right to control its own defense of such claim and the reasonable
fees and expenses of such separate counsel shall be borne by Magellan.
(d) If, after receipt of a claim notice pursuant to Section 1.1(b),
Magellan does not undertake to defend any such claim, the Indemnified Party may,
but shall have no obligation to, at Magellan's expense, contest any lawsuit or
action with respect to such claim and Magellan shall be bound by the result
obtained with respect thereto by the Indemnified Party (including, without
limitation, the settlement thereof without the consent of Magellan).
(e) Should the Indemnified Party receive any refund, in whole or in
part, with respect to any claim paid by Magellan hereunder, it shall promptly
pay the amount refunded (but not an amount in excess of the amount Magellan or
any of its (or any other person's) insurers has paid in respect of such claim)
over to Magellan.
ARTICLE II
GENERAL PROVISIONS
2.1 Governing Law. This Agreement is deemed to be executed and delivered
within the State of New York and shall be construed, interpreted and applied in
accordance with the laws of the State of New York.
2.2 Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter of this Agreement and
merges and supersedes all prior discussions between them relative to such
subject matter, and none of the parties shall be bound by any conditions,
definitions, warranties or representations other than as expressly provided in
this agreement or as duly set forth subsequent to the date hereof in writing and
signed by a proper and duly authorized officer of the party to be bound thereby.
2.3 Binding Effect. This Agreement inures to the benefit of and is binding
upon each party and their respective subsidiaries, affiliates, successors and
assigns.
2.4 Notices. All notices, requests, approvals, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be sent by telecopy to the telecopy number specified below. A copy of
any such notice shall also be sent by registered express air mail or nationally
recognized overnight delivery service on the date such notice is transmitted by
telecopy to the address specified below:
In the case of Magellan to:
PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Senior Vice President and General Counsel
Telephone (000) 000-0000
Telecopy (000) 000-0000
In the case of HE to:
Xxxxxx Electronics Corporation
0000 Xxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Either party may change its address or telecopy number for notification purposes
by giving the other party notice of the new address or telecopy number and the
date upon which it will become effective.
2.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one single agreement
between HE and Magellan.
2.6 Section Headings. The article and section headings are for reference
and convenience only and shall not be considered in the interpretation of this
Agreement.
2.7 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, then the remaining provisions of
this Agreement will remain in full force and effect.
2.8 Waivers. No delay or omission by either party to exercise any right or
power it has under this Agreement shall impair or be construed as a waiver of
such right or power. A waiver by any party of any breach or covenant shall not
be construed to be a waiver of any succeeding breach or any other covenant. All
waivers must be in writing and signed by the party waiving its rights.
2.9 Conflicts. In the event of a conflict between this Agreement and any
amendment the terms of such amendment shall prevail.
2.10 Amendment. No amendment to, or change, waiver or discharge of, any
provision of this Agreement shall be valid unless in writing and signed by an
authorized representative of the party against which such amendment, change,
waiver or discharge is sought to be enforced.
(Signature Page Follows)
IN WITNESS WHEREOF, the parties have caused this Leveraged Lease Guaranty
Indemnification Agreement to be executed by their duly authorized officers as of
the date first specified above.
MAGELLAN INTERNATIONAL, INC.
By: /s/Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Treasurer
XXXXXX ELECTRONICS CORPORATION
By: /s/Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice Chairman and Chief Financial Officer