Portions of this exhibit have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment. The redacted portions are identified by brackets with the character
"*" indicating deleted information.
EXHIBIT 10.55
TRANSPONDER PURCHASE AGREEMENT
FOR GALAXY V
BETWEEN
XXXXXX COMMUNICATIONS GALAXY, INC.
AND
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
[*] CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
Page
----
1. THE SATELLITES....................................................................................... 1
1.01 Satellites..................................................................................... 1
1.02 Scheduled Launch and Delivery Dates............................................................ 1
1.03 Transponders................................................................................... 2
1.04 Hybrid Satellites.............................................................................. 2
1.05 Specifications and Components.................................................................. 2
2. PURCHASE AND SALE OF TRANSPONDERS.................................................................... 2
3. PURCHASE PRICE AND PAYMENT SCHEDULE.................................................................. 3
3.01 Purchase Price Components Description.......................................................... 3
3.02 Purchase Price Component Amount................................................................ 3
3.03 Place of Payment............................................................................... 4
3.04 Prompt Repayment............................................................................... 4
4. DELIVERY AND RELATED MATTERS......................................................................... 4
4.01 Delivery....................................................................................... 4
4.02 Ownership, Title and Assumption of Risk........................................................ 5
4.03 Acceptance..................................................................................... 5
4.04 [*]............................................................................................ 5
4.05 [*]............................................................................................ 5
4.06 [*]............................................................................................ 5
4.07 [*]............................................................................................ 6
4.08 [*]............................................................................................ 7
4.09 [*]............................................................................................ 7
4.10 [*]............................................................................................ 8
4.11 [*]............................................................................................ 8
4.12 [*]............................................................................................ 9
4.13 Entitlement to Usage........................................................................... 9
5. REPRESENTATIONS AND WARRANTIES....................................................................... 10
5.01 Authority, No Breach........................................................................... 10
5.02 Corporate Action............................................................................... 10
5.03 Consents....................................................................................... 10
5.04 Litigation..................................................................................... 11
5.05 No Broker...................................................................................... 11
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TABLE OF CONTENTS
Page
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6. ADDITIONAL REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF HCG........................................ 11
6.01 Authorization Description..................................................................... 11
6.02 Transponder Performance Specifications........................................................ 11
6.03 Title......................................................................................... 11
6.04 Government Regulations........................................................................ 11
6.05 Not a Common Carrier.......................................................................... 12
6.06 TT&C.......................................................................................... 12
6.07 Transponder Customers......................................................................... 12
6.08 Transfers by HCG.............................................................................. 12
7. ADDITIONAL REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF BUYER...................................... 12
7.01 Transponder Usage............................................................................. 12
7.02 Non-Interference.............................................................................. 13
7.03 Government Regulations........................................................................ 13
8. PREEMPTIVE RIGHTS AND INSPECTION OF FACILITIES....................................................... 13
9. TRANSPONDER SPARES, RESERVE TRANSPONDERS AND RETAINED PRIMARY TRANSPONDERS........................... 14
9.01 Use of Transponder Spares..................................................................... 14
9.02 Use of Reserve Transponders................................................................... 14
9.03 Simultaneous Failure -- Priority with Respect to Use of Transponder Spares.................... 15
9.04 Simultaneous Failure -- Priority with Respect to Use of Reserve Transponders.................. 15
9.05 HCG's Ownership of Primary Transponders....................................................... 15
9.06 Notice of Intent to Substitute a Reserve Transponders......................................... 16
10. TERMINATION RIGHTS................................................................................... 16
10.01 Termination by Buyer.......................................................................... 16
10.02 Termination by HCG............................................................................ 17
10.03 HCG's Right to Sell if Non-Payment............................................................ 17
10.04 Prompt Repayment.............................................................................. 17
10.05 Termination of Buyer or HCG................................................................... 17
11. FORCE MAJEURE........................................................................................ 17
11.01 Failure to Delivery........................................................................... 17
ii
[*] CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
Page
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11.02 Failure of Performance..................................................................... 18
12. LIMITATION OF LIABILITY/BREACH OF WARRANTY......................................................... 18
12.01 Liability of HCG........................................................................... 18
12.02 Confirmed Failure.......................................................................... 18
12.03 Repayment for Failed Transponder........................................................... 19
12.04 Limitation of Liability.................................................................... 19
12.05 Obligations of Buyer to Cooperate.......................................................... 20
12.06 Scheduled Delivery Date.................................................................... 20
13. LIMITATIONS ON TRANSFER BY BUYER................................................................... 20
13.01 Transfers Generally........................................................................ 20
13.02 Transfer After Delivery.................................................................... 21
13.03 [*]........................................................................................ 22
13.04 Affiliate.................................................................................. 22
14. ENFORCEMENT OF USAGE RESTRICTIONS.................................................................. 22
14.01 Buyer's Restrictions....................................................................... 22
14.02 HCG's Enforcement Rights................................................................... 22
15. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS....................................... 22
15.01 Progress Reports........................................................................... 22
15.02 Inspection Rights of Buyer................................................................. 23
15.03 Access to Work in Progress and Selection of Transponders................................... 23
15.04 After Delivery Reports..................................................................... 23
16. CONFIDENTIALITY AND PRESS RELEASES................................................................. 23
16.01 Confidential Information................................................................... 23
16.02 Press Releases............................................................................. 24
17. DISPOSITION OF SATELLITE........................................................................... 24
17.01 Post-Warranty Period....................................................................... 24
17.02 Disposition of Satellite................................................................... 24
iii
TABLE OF CONTENTS
Page
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18. DOCUMENTS.................................................................................... 25
19. CONFLICTS.................................................................................... 25
20. MISCELLANEOUS................................................................................ 25
20.01 Interest............................................................................. 25
20.02 Applicable Law and Entire Agreement.................................................. 25
20.03 Notices.............................................................................. 25
20.04 Severability......................................................................... 26
20.05 Taxes................................................................................ 27
20.06 Successors........................................................................... 27
20.07 Headings............................................................................. 27
20.08 Survival of Representatives and Warranties........................................... 27
20.09 No Third-Party Beneficiary........................................................... 27
20.10 Non-Waiver of Breach................................................................. 27
20.11 Counterparts......................................................................... 28
EXHIBITS
A Spacecraft Replacement Plan
B.1 Transponder Performance Specifications: Galaxy V
B.2 Transponder Performance Specifications: Galaxy Backup
C Descriptions of Transponders
D Monthly Lease Rate Calculation
E Transponder Customer Lint
F Agreed Uses
G Description of Transponder Spares
iv
[*] CONFIDENTIAL TREATMENT REQUESTED
This agreement (the "Agreement") is made and entered into as of this 23rd
day of January, 1992 (the "Execution Date"), by and between Xxxxxx Communication
Galaxy, Inc. ("HCG") a corporation organized and existing under the laws of the
State of California, and International Family Entertainment, Inc. ("Buyer"), a
corporation organized and existing under the laws of the State of Delaware:
RECITALS
--------
WHEREAS, HCG intends to construct, launch and operate a number of
satellites, each containing C-Band capacity and desires to sell transponders on
such satellites; and
WHEREAS, Buyer desires to purchase and HCG desires to sell certain
transponders on one of such satellites.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual promises set forth below,
HCG and Buyer hereby mutually agree as follows:
1. THE SATELLITES
--------------
1.01 Satellites. HCG shall [*] a minimum of [*] referred to hereinafter
----------
as [*] HCG plans to launch certain other satellites to be located at the orbital
positions listed on Exhibit A or at such other positions as to which such
satellites, or their [*] in the event of a [*] may be assigned by the Federal
Communications Commission ("FCC") (with all such satellites hereinafter referred
to as the "Galaxy Fleet"). "Satellite" shall mean any one of the Galaxy Fleet
satellites.
1.02 Scheduled Launch and Delivery Dates. The proposed launch plan,
-----------------------------------
orbital positions, Spacecraft Replacement Plan and the "Scheduled Launch Dates"
of the Two Satellites are set forth on Exhibit A. HCG shall use its reasonable
best efforts to make Delivery (as defined in Section 4.01) no later than 60 days
after the Scheduled Launch Dates (the "Scheduled Delivery Dates"). HCG shall
use its reasonable best efforts to cause the launches to occur on or about the
Scheduled, Launch Dates and Delivery to occur on or about the Scheduled Delivery
Dates, provided, however, that HCG shall have the right to determine, in its
sole discretion which launch vehicles to use, HCG shall have the right to change
each of the Scheduled Launch Dates as required by the availability of launch
reservations and by such other events as HCG determines require changes in such
dates, and HCG shall not be required to pay for launch services at commercially
unreasonable rates, based on prevailing launch market rates, to obtain a
particular launch date. The Scheduled Deliver) Dates shall not change as a
result of any change in the Scheduled Launch Dates. HCG shall have the right to
use earlier launch dates for either of the Two Satellites; provided, however,
that Delivery for any of Buyer's Transponders (as defined in Section 2) shall
not be accelerated by more than three (3) months without the consent of Buyer
unless otherwise agreed by the parties. If HCG
1
[*] CONFIDENTIAL TREATMENT REQUESTED
does not make Delivery on the Scheduled Delivery Date, it shall use its
reasonable best efforts to make Delivery as soon thereafter as possible. The
actual date of Delivery of Buyer's Transponders shall be called the "Delivery
Date." Notwithstanding anything elsewhere in this Agreement to the contrary, the
parties acknowledge that HCG cannot, and shall not, be obligated to Deliver
Transponders on Galaxy V or move [*] the assigned orbital position of Galaxy V
until Westar V has been removed or retired from its assigned orbital position.
1.03 Transponders. Each of the Two Satellites shall have twenty four (24)
------------
C. Band transponders (the "Transponders"). Twenty-two (22) of the Transponders
on Galaxy V shall be designated "Primary." The remaining two (2) Transponders
on Galaxy V shall be designated as "Reserve". "Primary Transponders" shall mean
Transponders which are not preemptible and as to which the "Owners" of the
Transponders, if a "Confirmed Failure" (as hereafter defined) occurs, shall have
the right to preempt a Reserve Transponder in accordance with Section 9.02.
"Reserve Transponders" shall mean Transponders which shall be preemptible in
accordance with Section 9.02, by Owners of Primary Transponders located on the
same Satellite that have suffered a Confirmed Failure. Each such Satellite also
shall have six (6) "Transponder Spares," as defined in Section 9.01. All of
Galaxy Backup's twenty. four (24) C-Band Transponders shall be preemptible in
order to satisfy HCG's backup obligations set forth in Section 4. As used in
this Agreement, "Owner" shall include the actual owner of a Transponder,
including HCG if there remain any, unsold Transponders, or any permitted
assignee of such owner's Transponder, or any lessee or licensee of HCG's with a
term of usage of eight (8) or more years (a "Long Term Lease"). The term
"purchase" shall include the execution of an agreement with HCG for a Long Term
Lease.
1.04 Hybrid Satellites. If HCG uses a hybrid Satellite (i.e. a Satellite
-----------------
containing both Kn-Band and C-Band capacity), then the owners or users of the
Ku-Band capacity on any such hybrid Satellite shall have no rights whatsoever to
use the Transponder Spares, the Reserve Transponders or any other part of the C-
Band payload on such hybrid Satellite.
1.05 Specifications and Components. Exhibit B.1 sets forth the
-----------------------------
"Transponder Performance Specifications", defined as certain technical
specifications for the Transponders on Galaxy V, including values for each
Transponder for polarization isolation, interference between Transponders,
frequency response, group delay, amplitude non-linearity, spurious outputs,
phase shift, cross talk. stability, transmit EIRP, uplink saturation flux
density, and G/T. Exhibit B.2 lists "Transponder Performance Specifications"
for Galaxy Backup. ACG shall make copies of the antenna range gain contour test
data available to Buyer. Exhibit C sets forth a list of the Satellite
components which constitute the Transponders to be purchased by Buyer.
2. PURCHASE AND SALE OF TRANSPONDERS
---------------------------------
HCG shall sell, and Buyer shall purchase one (1) Primary Transponders on
Galaxy V ("Buyer's G-V Transponders" or "Buyer's Transponders"), all of which
are on a "Delivered"
2
[*] CONFIDENTIAL TREATMENT REQUESTED
and "Fully Warranted" basis (as each such term is defined in Sections 4.0l and
6.02. respectively).
3. PURCHASE PRICE AND PAYMENT SCHEDULE
-----------------------------------
3.01 Purchase Price Components Description. The purchase price for each of
-------------------------------------
Buyer's Transponders shall consist of a [*] The payment for each of the these
Components by Buyer is mandatory, although one such component has a payment
option to be chosen by Buyer. The services to be provided by HCG in return for
Buyer's payment of the Purchase Price Components are described in other sections
of this Agreement. All prices set forth are on a per Transponder basis.
3.02 Purchase Price Component Amount. The Purchase Price Components
-------------------------------
payment terms and certain refunds for each of Buyer's Transponders shall be as
follows:
[*] Any change hereafter in the Schedule Launch Date shall not affect
payment schedule.
[*] Payments for a partial month shall be pro-rated. If one of Buyer's
Transponders becomes a Failed Transponder (as defined in Section 12.01), then
the [*] fee shall cease as to such Failed Transponder. [*] (as defined in
Section 6.02) for such Failed Transponder and a proportionate refund (without
interest) made to [*] Payments for a partial year shall be pro-rated.
[*] Payments for a partial year shall be a pro-rated.
[*] The [*] for each of Buyer's Transponders shall be a per month fee of
[*] The [*] shall be payable as to each of Buyer's Transponders only if (i) [*]
(as defined in Section 3.02(f) to be [*] and (ii) Buyer is not paying the
Monthly Lease Rate (as defined in Section 4.09(b)) for such Transponder. The
3
[*] CONFIDENTIAL TREATMENT REQUESTED
[*] Payments for a partial month shall be pro-rated.
[*] The [*] shall be [*] for each of Buyer's Transponders, payable on the
[*] If [*] (as defined in Section 4.04)[*] (without interest) for each of
Buyer's G-V Transponders for which Buyer has paid [*]
[*] if each of the following conditions are satisfied: (i) [*] with the
Delivery of at least twenty-two (22) Transponders meeting its Transponder
Performance Specifications, is in orbit and has not itself suffered a
Catastrophic Failure, and has sufficient Transponders on it that meet its
Transponder Performance Specifications to satisfy HCG's [*] to Buyer, (ii) [*]
(as defined for all Satellites pursuant to Section 4.11) and (iii) [*]
3.03 Place of Payment. All payment by Buyer shall be made to HCG at its
----------------
principal place of business, as designated in Section 20.03, and shall be deemed
to be made only upon actual receipt by HCG. All refunds by HCG shall be made to
Buyer at its principal place of business as designated in Section 20.03, and
shall be deemed to be made only upon actual receipt by Buyer.
3.04 Prompt Repayment. All refunds provided for in this Section 3 to be
-----------------
made by HCG shall be due and paid within fifteen (15) business days of
notification to HCG of the occurrence of the event giving rise to such refund
and any late payment by HCG to Buyer shall be with interest calculated al the
rate set forth in Section 20.01, payable with the amount due and calculated from
the date payment was due until the date it is received by Buyer.
4. DELIVERY AND RELATED MATTERS
----------------------------
4.01 Delivery. Galaxy V Delivery shall occur upon, and "Delivery",
--------
"Delivered" and "Deliver", as to Galaxy V shall mean (i) the placing of the
Satellite, containing all of Buyer's Transponders, in its assigned orbital
position with a total of twenty-two (22) Primary Transponders on such Satellite
meeting the relevant performance specifications required to complete Delivery
pursuant to the Transponder Purchase' Agreement of the Owners of such
Transponders (such 22 Transponders meeting their respective performance
specifications being referred to hereinafter as the "22 Performing
Transponders") (all of which requirement may be met through the use of Reserve
Transponders or Transponder Sparest, (ii) Buyer's acceptance of its Transponders
as provided for in Section 4.03 and (iii) full payment by Buyer as provided in
Section 4.02.
4
[*] CONFIDENTIAL TREATMENT REQUESTED
4.02 Ownership, Title and Assumption of Risk. Ownership and title to
---------------------------------------
Buyer's Transponders shall pass to Buyer at the time of Delivery to Buyer. A
condition to HCG's obligation to deliver title to Buyer, and of Buyer's
obtaining ownership, shall be the payment by Buyer of all amounts due to HCG on
or prior to Delivery for such Transponder or Transponders. Any loss of or damage
to Buyer's Transponders prior to Delivery shall be at the risk of HCG. Any loss
of or damage to Buyer's Transponders after Delivery to Buyer will be at the risk
of Buyer; provided however, that the foregoing shall not impair Buyer's other
rights under Sections 4, 9 and 12 of this Agreement.
4.03 Acceptance. HCG shall not use Buyer's Transponders for any purpose
----------
other than testing, as set forth herein, prior to Delivery. HCG shall test each
of Buyers Transponders in accordance with an acceptance test plan to be prepared
hy HCG in advance of the launch of the Satellite and delivered to Buyer.
Acceptance of Buyers Transponders by Buyer shall be deemed to have occurred upon
completion of the following: (a) Buyer's Transponders have passed all tests set
forth in the aforementioned acceptance test plan and meet the Transponder
Performance Specifications; and (b) HCG has notified Buyer in writing that it
has successfully completed testing Buyer's Transponders and that Buyer's
Transponders are available for service.
4.04 Late Delivery; Delivery Failure Defined.
---------------------------------------
(a) "Late Delivery", as to Galaxy V, shall mean failure to place such
Satellite in its assigned orbital position with the 22 Performing
Transponders within thirty (30) days after the Scheduled Delivery Date.
(b) "Delivery Failure" of Galaxy V shall mean failure, after a launch
attempt has occurred, to place such Satellite in its assigned orbital
position with the 22 Performing Transponders within ninety (90) days after
the launch date, or on the Scheduled Delivery Date if such Satellite was
launched earlier than the initial Scheduled Launch Date specified in
Exhibit A. As used herein, launch attempt shall mean the actual lift off
of the launch vehicle.
4.05 [*] is scheduled to be launched in advance of launching Galaxy V in
order to provide actual, [*] for the Galaxy Fleet
4.06 [*]
(a) If a [*] occurs after the [*] then HCG shall be obligated, subject
to FCC approval, [*] Transponder Performance Specifications. The target [*]
for each such [*] will be [*] after the [*] and HCG shall use its
reasonable best efforts to [*] Delivery can occur within [*]
5
[*] CONFIDENTIAL TREATMENT REQUESTED
(b) If the [*] is not Available at any time prior to the expiration of
the [*] then HCG shall not be obligated to Buyer [*] Satellite or make
Transponders available to Buyer [*] replacement for Buyer's use unless
Buyer exercises its [*] (as defined in Section 4.07).
(c) [*] Buyer shall be entitled [*] payments made for its Transponders
on Galaxy V. After a single [*] of Galaxy V, HCG shall have an additional
[*] after such [*] to complete [*] such that it is ready for delivery to a
[*] If a [*] not ready for delivery to a [*] within [*] after a [*] (the
"Satellite Readiness Date"), then Buyer shall have the right [*] of all
payments made for Buyer's Transponders. In addition, Buyer shall have the
right to [*] of all payments made for Buyer's Transponders if HCG has not
Delivered [*] within [*] of the Satellite Readiness Date. All such
repayments shall be made without interest. Except as specifically provided
otherwise herein, Buyer shall not be entitled to any refund of its Galaxy V
payments after only [*] If Buyer does not notify HCG of its intent to
terminate its obligations pursuant to this Section 4.06(c) [*] of the date
which triggers such right, Buyer shall be deemed to have waived such right.
(d) No change in any of the [*] payable by Buyer shall be made by HCG
as a result of any [*] or a [*] of Galaxy V or as a result of [*] except as
provided in the [*]
4.07 [*]
(a) If the [*] launch [*] or [*] is not Available at any time prior to
the expiration of the [*] of G-V, then HCG may launch [*]
(b) HCG shall determine the minimum price and payment terms needed by
it to build and launch the [*] which satellite shall have at least
equivalent Transponder Performance Specifications to those of [*] and shall
determine an estimated launch and delivery date. The [*] shall then be
offered by HCG to all entities that have committed [*] C-Band transponders
on any Galaxy Fleet Satellite and have [*] or its equivalent on the same
basis as it is offered to Buyer (the [*] Such entities shall have [*] days
to deliver their response to such offer to HCG. If HCG obtains commitments
for the [*] needed by it to build and launch the [*] then HCG shall be
obligated,
6
[*] CONFIDENTIAL TREATMENT REQUESTED
subject to FCC approval, to launch the [*] HCG shall use its reasonable
best efforts to obtain such FCC approval and to cause construction to
commence and to obtain a launch date so that [*] is ready for delivery to a
launch facility within [*] and placed in its assigned orbital position and
operational within [*] of HCG's receipt of the requisite commitments. The
[*] shall then function, subject to Section 4.08, as the [*]
4.08 [*] If [*] suffers a [*] and Buyer exercises its [*] and thereafter
[*] suffers a [*] and if the Transponder Performance Specifications of the [*]
are equal to or higher than the G-V Transponder Performance Specifications, then
the [*] shall, subject to FCC approval, become [*] and [*] shall become the [*]
4.09 [*]
(a) Pursuant to Sections 4.09 through 4.12, Buyer shall have certain
rights to use Transponders on [*] Since [*] is to be used for the
protection of a number of Satellites, it will be moved to the Galaxy V
orbit position in accordance with Sections 4.10 or 4.11 only if it is
Available.
(b) If and when a Transponder on [*] is used by Buyer in accordance
with Sections 4.10 through 4.12, then (i) Buyer shall begin paying a
monthly lease payment per Transponder [*] calculated in Exhibit D) for such
[*] (the [*] (ii) [*] for such Transponder and (iii) pursuant to [*] If
Buyer has made a lump sum payment of the [*] then Buyer shall [*]
(c) Nothing shall prevent HCG from using [*] for other services or as
a [*] for satellites not part of the Galaxy Fleet so long as, if [*] is
needed to backup Galaxy V in accordance with Sections 4.10, 4.11 and 4.12
or the other Galaxy Fleet Satellites, then such other service or use is
preemptible. HCG shall be entitled to use [*] only in orbital positions
assigned to it by the FCC or to which the FCC allows it to be moved. [*]
shall not be moved to another orbital position at a rate faster than [*]
unless [*] of Galaxy V or another Galaxy Fleet Satellite which has suffered
a [*] (as defined in the equivalent to Section 4.11 in the Transponder
Purchase Agreement of any other Owner).
7
[*] CONFIDENTIAL TREATMENT REQUESTED
4.10 [*] If any of the following occurs: (i) [*] of Galaxy V occurs and [*]
is no longer in service, (ii) [*] Galaxy V, (iii) Galaxy V is not [*] (as
defined below) or (iv) on [*] HCG knows of circumstances which will prevent HCG
from making Delivery of Galaxy V on or before [*] then the following shall
occur:
(a) HCG, subject to FCC approval (which HCG shall promptly use its
best efforts to obtain), shall cause [*] provided it is Available, to be
moved to the orbit position of Galaxy V [*] of the earlier of notification
to HCG or HCG's knowledge of the aforementioned event;
(b) Buyer shall [*] a number of Transponders on [*] equal to the
number of Transponders it has [*] on Galaxy V, and shall pay the Monthly
Lease Rate for each Transponder on [*] that it is [*] and
(c) Buyer shall continue such lease of [*] Transponders until the
earlier to occur of (1) [*] by HCG of G-V or a [*] as appropriate, in
such orbital position, at which time Buyer, if [*] to [*] Buyer's
Transponders, shall commence paying the monthly [*] or (2) [*]
Galaxy V shall be deemed [*] HCG has delivered Galaxy V to the launch
facility at which HCG has contracted for the launch of Galaxy V, and the launch
date is on or before a date that is expected to result in [*]
4.11 [*] If, after successful Delivery of Buyer's Transponders on Galaxy V,
Galaxy V experiences a [*] then the following shall occur:
(a) HCG, subject to FCC approval (which HCG shall promptly use its
best efforts to obtain), shall cause [*] provided it is Available, to be
moved to the orbit position of Galaxy V [*] earlier of notification to HCG
or HCG's knowledge of such [*]
(b) Buyer shall lease a number of Transponders on [*] equal to the
number of Transponders it had purchased on Galaxy V and shall pay the
Monthly Lease Rate for each Transponder on [*] that it is leasing; and
(c) Buyer shall continue such lease of [*] Transponders until the
earlier to occur of (1) the successful placement with the requisite number
of Transponders meeting the Transponder Performance Specifications by HCG
of a [*] in such orbital position, at which time Buyer, if [*] is
8
[*] CONFIDENTIAL TREATMENT REQUESTED
Available to [*] Buyer's Transponders, shall resume paying the monthly
[*] or (2) the [*]
HCG agrees that the [*] and [*] definitions shall require the same or
a greater level of failure for all other Galaxy Fleet Satellites for the
purposes of determining whether HCG [*]
4.12 [*] If any of Buyer's Transponders on Galaxy V become Failed
Transponders or Delivery of Buyer's G-V Transponders is delayed past their
Scheduled Delivery Date, then the following shall occur:
(a) Buyer shall have the right, provided that such Transponders are
"non-committed" (as defined below), to [*] Buyer shall have the right to
lease such Transponders in whatever location [*] may then be, provided that
Buyer commits to such a lease within [*] days following the occurrence of
the event giving rise to the right;
(b) Buyer shall pay the [*] for each Transponder on [*] that it is
leasing; and
(c) Buyer shall continue such [*] until the earlier to occur of (1)
the successful placement with the requisite number of Transponders meeting
the Transponder Performance Specifications by HCG of [*] as appropriate [*]
in the Galaxy V orbital position, at which time Buyer, if [*] is Available
to [*] Buyer's Transponders, shall commence or resume, as appropriate,
paying the monthly [*] (2) the end of [*] (3) [*] in accordance with
Sections 4.09, 4.10 and 4.11, or the equivalent of such Sections in the
purchase agreement of any other Owner.
A Transponder on [*] shall be deemed to be [*] if such Transponder is
not already being used by an entity having [*] over Buyer pursuant to the
exercise of its right to use such Transponder as a result of payment to HCG for
an [*] or its equivalent, in connection with its purchase of a transponder or
transponders on a Satellite.
4.13 Entitlement to Usage. If Owners of [*] on Galaxy V become
--------------------
simultaneously entitled to lease Transponders on [*] the Owner of the Primary
Transponder with the [*] or, if not so set forth, then the Owner (or Owner's
predecessor in interest) who first executed a Transponder Purchase Agreement
with HCG for the purchase of a Primary Transponder shall have a priority as to
the [*] Transponders.
9
5. REPRESENTATIONS AND WARRANTIES
------------------------------
HCG and Buyer each represent and warrant to the other that:
5.01 Authority, No Breach. It has the right, power and authority to enter
--------------------
into, and perform its obligations under, this Agreement. The execution,
delivery and performance of this Agreement shall not result in the breach or
non-performance of any agreements it has with third parties.
5.02 Corporate Action. It has taken all requisite corporate action to
----------------
approve execution, delivery and performance of this Agreement, and this
Agreement constitutes a legal, valid and binding obligation upon itself in
accordance with its terms.
5.03 Consents. The fulfillment of its obligations hereunder will not
--------
constitute a material violation of any existing applicable law, rule, regulation
or order of any governmental authority. All material necessary or appropriate
public or private consents, permissions, agreements, licenses, or authorizations
to which it or any Transponder or any Satellite may be subject have been or
shall be obtained in a timely manner; provided, however, that it shall be HCG's
sole responsibility to obtain any regulatory approvals needed to enable it to
sell Transponders as provided for in this Agreement. Notwithstanding the above,
HCG and Buyer acknowledge that the transactions set forth in this Agreement may
be challenged before the FCC of a court of competent jurisdiction by other
persons or entities not parties hereto. In such event. HCG and Buyer agree that
HCG shall use its best efforts, and Buyer shall use reasonable efforts, before
the FCC, and the courts if an appeal from an FCC order is taken, to support
HCG's right to sell and Buyer's right to purchase Buyer's Transponders and shall
fully cooperate with each other in these endeavors. Buyer alone shall have the
right to determine how much and to whom it will incur legal expenses in
connection with any proceeding arising out of its obligations under this Section
5.03. If, however, by written order, the FCC or a court of competent
jurisdiction shall determine that HCG may not tell and Buyer may not purchase
Buyer's Transponders under the terms and conditions set forth herein, then HCG
and Buyer shall seek immediate review of such order before the FCC or an
appellate court or shall, if possible, reconstitute the transaction to comply
with such order and to provide Buyer with use of "equivalent capacity" on the
Satellites and to provide HCG with the "price provided for herein." As used
herein, "equivalent capacity" shall mean the same number of Transponders
purchased by Buyer pursuant to this Agreement; provided that the Satellites are
dedicated primarily to Cable Entertainment Services (as defined in Section 7.01)
and that HCG is able to reconstitute its transponder purchase agreement with the
Xxxxxx/HBO Limited Purpose Joint Venture, and there is no material adverse
change in the provisions of this Agreement regarding purchase price taking into
account payment terms using a present value analysis, tax benefits from the form
of the transactions, Warranty Period, use of Transponder Spares and Reserve
Transponders, and Transponder Performance Specifications. As used herein,
"price provided for hereto" shall mean the total price payable to HCG, taking
into account payment terms, using a present value analysis with a 12% annual
discount rate, and tax benefits from the form of the transactions. If an
appellate court issues a written order, which is no longer subject to further
judicial rehearing or review, upholding the determination
10
of the FCC or a court of competent jurisdiction that HCG may nor sell and Buyer
may not purchase Buyer's Transponders, then HCG and Buyer shall, if possible,
reconstitute the transaction as set out herein.
5.04 Litigation. To the best of its knowledge, there is no outstanding or
----------
threatened judgment, pending litigation or proceeding, involving or affecting
the transaction provided for in this Agreement, except as has been previously or
concurrently disclosed in writing by either party to the other.
5.05 No Broker. It does not know of any broker, finder or intermediary
---------
involved in connection with the negotiations and discussions incident to the
execution of this Agreement, or of any broker, finder or intermediary who might
be entitled to a fee or commission upon the consummation of the transactions
contemplated by this Agreement.
6. ADDITIONAL REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF HCG
-------------------------------------------------------------
6.01 Authorization Description. HCG has obtained from the FCC the
-------------------------
authority to launch and operate the Two Satellites and to sell or lease
Transponders on each of the Two Satellites on a private non-common carrier
basis. HCG has obtained from the FCC the authority to place Galaxy V in
geostationary orbit at 125' West Longitude and shall utilize such orbital
location or the existing orbital location for Westar V unless prevented by
subsequent order of the FCC or any successor thereto, in which event HCG shall
utilize such other orbital position closest to such position that the FCC or any
successor thereto may designate for such Satellite and, to the extent possible,
the orbital position closest to those positions outlined above. The Two
Satellites will be "communications satellites" (as defined in Section 1.03(3) of
the Communications Satellite Act of 1962, 47 U.S.C. 702(3)).
6.02 Transponder Performance Specifications. Buyer's Transponders, upon
--------------------------------------
Delivery, shall al least meet the Transponder Performance Specifications
throughout the duration of the Warranty Period. "Warranty Period" shall mean
that period of time commencing on the Delivery Date and continuing until ten
(10) years after the Delivery Date. "Fully Warranted" as to Buyer's G-V
Transponders shall mean that, if any of Buyer's G-V Transponders become Failed
Transponders during the Warranty Period, then Buyer shall be entitled to the
repayment set forth in Section 12.03.
6.03 Title. Upon Delivery and subject to Section 4.02, HCG shall deliver
-----
to Buyer good title to each of Buyer's Transponders free from all liens,
charges, claims or encumbrances, except for any encumbrances resulting from any
action taken by Buyer.
6.04 Government Regulations. HCG has or shall use its best efforts
----------------------
throughout the Warranty Period, and until disposition of Galaxy V pursuant to
Section 17, to obtain and maintain, in all material respects, all applicable
federal, state and municipal authorizations or permissions to construct, launch
and operate the Two Satellites, applicable to it; and to comply, in all material
respects, with all such government regulations regarding the construction,
launch and operation of the Two Satellites and Transponders applicable to it.
11
[*] CONFIDENTIAL TREATMENT REQUESTED
6.05 Not a Common Carrier. Unless required to do so by the FCC, HCG shall
--------------------
not hold itself out, publicly or privately, as a provider or common carrier
communications services on Galaxy V and is not purporting herein to provide to
Buyer or to any other party any such services with respect to Galaxy V.
6.06 TT&C. Tracking, telemetry and control ("TT&C") shall be provided by
----
Xxxxxx Communications Satellite Services, Inc. ("HCSS"), an affiliate of HCG,
for the life of the [*] pursuant to a separate "TT&C Service Agreement" which
has been executed by HCSS and Buyer concurrently herewith. The [*] is to pay
HCSS for these services.
6.07 Transponder Customers. Exhibit E, which will ix: delivered by HCG to
---------------------
Buyer within sixty (60) days of the Execution Date, and updated every sixty (60)
days thereafter until all Transponders have been committed, is a list of all
customers who have executed a Transponder Purchase Agreement (or other agreement
providing for the Transfer of a Transponder, other than for short term leases or
part time video as set forth in Section 6.08) and the number of Transponders
such customers will purchase pursuant to such agreement on Galaxy V and the
[*] of each such customer. Where such customer has the [*] its purchase
obligations as to any Transponder, the number of Transponders as to which it has
a [*] is indicated. Where such customer has an option to purchase additional
Transponders, the number of Transponders as to which it has an option is also
indicated. Exhibit E will also indicate the [*] of each such committed
Transponder under Sections 8 and 9 and other Sections of this Agreement, and if
such committed Transponder is a Reserve Transponder.
6.08 Transfers by HCG. HCG shall not Transfer, as defined below, other
----------------
than for part time video or for leases with a term of less than two (2) years,
any of the Transponders to any third party without requiring, in all such
agreements, clauses substantially identical to the provisions in Sections 7.02,
7.03, 8, 9.01, 9.02, 9.03, 9.04, 9.05, 10.01, 12.02, 12.05, 14, 17, the first
sentence of 20.02, 20.05 and 20.09. "Transfer' shall mean to grant, sell,
assign, encumber, permit the utilization of, license, lease, sublease or
otherwise convey, directly or indirectly, in whole or in part. Any Transfer by
HCG for part time video or under a lease for a term of less than two (2) years
without such clauses shall be consistent, in all material respects, with HCG's
obligations to Buyer under this Agreement.
7. ADDITIONAL REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF BUYER
---------------------------------------------------------------
7.01 Transponder Usage.
-----------------
(a) Buyer agrees to the G-V Transponder usage restrictions and
obligations set forth on Exhibit F (the "Agreed Uses") for a period of two
years following Delivery of such Satellite, such usage to commence no later
than ninety (90) days following Delivery. In addition, Buyer agrees to use
Buyer's G-V Transponder, or Buyer's G-V Transponders in the aggregate if
more than one Transponder is purchased, primarily for "Cable Entertainment
Services" (as defined below) for the
12
useful life of such Transponder(s) or any replacement or backup
Transponders hereunder.
(b) The Agreed Uses and the restrictions on use for Cable
Entertainment Services shall bind any successor-in-interest, or any
assignee. of Buyer or Buyer's rights hereunder and shall bind any purchaser
or successor-in-interest to Buyer's Transponders (i.e.. the usage
restrictions shall follow the programming and Buyer's Transponders).
(c) HCG shall include in the Transponder Purchase Agreement of each
other Owner (or other agreement providing for the Transfer of a
Transponder, other than for short term leases or part time video as set
forth in Section 6.08) a provision requiring each such Owner to use its
Transponder, or Transponders in the aggregate, primarily for Cable
Entertainment Services. "Cable Entertainment Services" shall mean consumer
entertainment and information services which shall be delivered to cable
television systems and which may also be concurrently delivered through
other forms of distribution to consumers.
(d) These provisions are of the essence to this Agreement.
7.02 Non-Interference. Buyer's radio transmissions to the Two Satellites
----------------
shall comply with FCC and other governmental orders, rules and regulations, and
shall not interfere with the use of any other Transponder. Buyer shall not
utilize any of Buyer's Transponders in a manner which will or may interfere with
the use of any other Transponder or cause physical harm to any of Buyer's
Transponders, any other Transponders, or to the Satellites. For purposes of
this Section 7.02, interference shall also mean causing a Transponder to fail to
meet its Transponder Performance Specifications.
7.03 Government Regulations. Buyer shall use its best efforts to comply,
----------------------
throughout the Warranty Period and until disposition of the Satellites pursuant
to Section 17, in all material respects, with ale government regulations
regarding the operation of the Two Satellites and its purchase and use of
Buyer's Transponders applicable m it.
8. PREEMPTIVE RIGHTS AND INSPECTION OF FACILITIES
----------------------------------------------
Buyer recognizes that it may be necessary in unusual or abnormal situations
or conditions for HCG deliberately to preempt or interrupt Buyer's use of each
of its Transponders, in order to protect the overall performance of the
Satellites. Such decisions shall be made by HCG in its sole discretion;
provided, however, that, to the extent it is technically feasible, HCG shall
preempt or interrupt the use of Transponders in the inverse order of priority as
set forth on Exhibit E or, If not so set forth, in the inverse order in which
the Owners (or such Owner's predecessors in interest) on such Satellite executed
Transponder Purchase Agreements for its Transponders on such Satellite. To the
extent technically feasible, HCG shall give Buyer at least forty-eight (48)
hours' notice of such preemption or interruption and HCG shall use its
reasonable best efforts to schedule and conduct its activities
13
during periods of such preemption or interruption so as to minimize the
disruption to the use of Transponders on such Satellite. To the extent that such
preemption results in a loss to Buyer of the use of Buyer's Transponders
sufficient to constitute a breach of HCG's warranty obligations as set forth in
Section 12, then Buyer shall have all of the rights and remedies set forth in
Sections 4. 9 and 12.
9. TRANSPONDER SPARES, RESERVE TRANSPONDERS AND RETAINED PRIMARY TRANSPONDERS
--------------------------------------------------------------------------
9.01 Use of Transponder Spares. HCG shall cause Galaxy V to contain
-------------------------
certain redundant equipment units (individually, a "Transponder Spare") as
described in Exhibit G, which are designed as substitutes for equipment units
the failure of which could cause a Transponder to fail to meet the Transponder
Performance Specifications. HCG, as soon as possible and to the extent
technically feasible, shall employ a Transponder Spare in such Satellite as a
substitute for Buyer's Transponder equipment unit which has caused one of
Buyer's Transponders to suffer a Confirmed Failure (as defined in Section 12.02)
in order to enable Buyer's Transponders to meet the Transponder Performance
Specifications. To the extent technically feasible, a Transponder Spare will be
substituted for the faulty equipment unit on a first-needed, first-served basis
to satisfy HCG's warranty obligations to Buyer and to other Owners or users of
Transponders on the same satellite which have suffered Confirmed Failures;
provided, however, that HCG's obligations to provide Transponder Spares shall
continue until such time as all of the Transponder Spares are committed to use
as substitutes for Transponders which have suffered Confirmed Failures. If HCG
furnishes a Transponder Spare to Buyer as a substitute for an equipment unit
which has caused Buyer's Transponder to suffer a Confirmed Failure, then HCG
shall transfer title and ownership of the Transponder Spare to Buyer, and Buyer,
concurrently, shall return title and ownership of its substituted Transponder
equipment unit to HCG. Buyer's Transponder equipment unit which has been
returned shall be made available by HCG, to the extent technically feasible, to
satisfy its obligations to Owners or users on the same Satellite. HCG also
shall have the right, until the Transponder Spares are needed, to utilize such
Transponder Spares in any manner HCG determines.
9.02 Use of Reserve Transponders. If no Transponder Spare is available at
---------------------------
the time that Buyer's Transponder suffers a Confirmed Failure or if the use of
such Transponder Spare would not correct the failure, then HCG shall employ, as
soon as possible and to the extent technically feasible, and unless any delay is
requested by Buyer, a Reserve Transponder on Galaxy V as a substitute for such
Transponder which has suffered a Confirmed Failure; provided, however, that
HCG's obligation to provide Reserve Transponders to Buyer shall continue only
until such time as all of the Reserve Transponders are committed to use as
substitutes for Primary Transponders which have suffered a Confirmed Failure.
HCG shall include in the Transponder Purchase Agreement of any Owner who has
purchased a Reserve Transponder (or in any other agreement providing for the
Transfer of a Reserve Transponder) a requirement that HCG may preempt such
Reserve Transponder(s) after two (2) hours notice from HCG. Reserve
Transponders utilized as substitutes shall meet the Transponder Performance
Specifications. Reserve Transponders, or any one of them, will be substituted
14
and utilized on a first-needed, first-served basis to satisfy HCG's obligations
to Buyer and to other Owners with respect to the performance of their Primary
Transponders. HCG shall have the right, in its sole discretion, to utilize
first a Transponder Spare prior to furnishing a Reserve Transponder to Buyer.
If HCG furnishes a Reserve Transponder to Buyer, then HCG shall transfer title
and ownership of such Reserve Transponder to Buyer and Buyer concurrently shall
return title and ownership of its substituted Transponder to HCG. Buyer's
Transponder which has been returned to HCG shall thereafter be made available by
HCG, to the extent technically feasible, to satisfy its obligations to other
Owners. HCG also shall have the right, until the Reserve Transponders are
needed, to utilize them in any manner HCG determines.
9.03 Simultaneous Failure -- Priority with Respect to Use of Transponder
-------------------------------------------------------------------
Spares. In the event that Primary Transponders of more than one Owner
------
simultaneously suffer a Confirmed Failure, then the Owner of the Primary
Transponder with the highest priority as set forth on Exhibit E shall have
priority as to the use of Transponder Spares or, if not so set forth, then the
Owner (or such Owner's predecessor in interest) who first executed a Transponder
Purchase Agreement with HCG shall have priority as to use of Transponder Spares
with respect to said Owner's Primary Transponder or Transponders which have
suffered a Confirmed Failure, to the extent technically feasible. As used in
this Section 9, the term "simultaneously" shall be deemed to mean occurring
within a 24-hour period.
9.04 Simultaneous Failure -- Priority with Respect to Use of Reserve
---------------------------------------------------------------
Transponders. In the event that Primary Transponders of more than one Owner
------------
simultaneously suffer a Confirmed Failure, and no Transponder Spare is available
or if the use of such Transponder Spare would not correct the failure, then the
Owner of the Primary Transponder with the highest priority as set forth on
Exhibit E shall have priority as to the use of Reserve Transponders or, if not
so set forth, then the Owner (or such Owner's predecessor in interest) who first
executed a Transponder Purchase Agreement with HCG for the purchase of a Primary
Transponder on such Satellite shall have priority as to use of a Reserve
Transponder with respect to said Owner's Primary Transponder or Transponders
which have suffered a Confirmed Failure.
9.05 HCG's Ownership of Primary Transponders. If HCG is unable to sell all
---------------------------------------
of the Primary Transponders, then HCG may retain ownership of such unsold
Primary Transponders ("HCG's Transponders"). (The same provision shall apply
with respect to Reserve Transponders.) In such event, HCG shall have the same
rights to use HCG's Transponders as any other Owners would have, including,
without limitation, the right to utilize Transponder Spares and Reserve
Transponders in the event HCG's Transponders do not meet the Transponder
Performance Specifications. HCG also shall have the right, but not the
obligation, to utilize HCG's Transponders to satisfy HCG's warranty obligations
to Buyer and to other Owners. HCG shall be deemed to have been the last entity
to execute a Transponder Purchase Agreement for purposes of determining its
priority under the provisions of this Section 9 and other Sections of this
Agreement; provided, however, that if HCG Long Term Leases an unsold Primary
Transponder to a third party, such third party shall, for purposes of
determining its priority under the provisions of this Section 9, or elsewhere in
this Agreement,
15
be deemed to have "purchased" such Transponder and to have executed a
Transponder Purchase Agreement on the date it executed such Long Term Lease.
9.06 Notice of Intent to Substitute a Reserve Transponders. Prior to the
-----------------------------------------------------
substitution of a Reserve Transponder for Buyer in accordance with this Section
9, HCG shall notify Buyer in advance of its intention to so substitute the
Reserve Transponder and the substitution shall be made at such time as the
parties mutually agree.
10. TERMINATION RIGHTS
------------------
10.01 Termination by Buyer.
---------------------
(a) Except where there has been a Delivery Failure of Galaxy V and
HCG has commenced to construct a replacement for such failed
Satellite, Buyer shall have the right to cancel its obligations to
purchase all of its undelivered G-V Transponders if HCG has failed to
make Delivery of any such Transponders:
(i) on or after December 31, 1993 if the primary cause of such
failure is HCG's Fault (as defined in Section 10.01(d)) and Galaxy
Backup is not Available for use as a backup to such G-V Transponders;
or
(ii) on or after December 31, 1994 if Galaxy Backup is not
Available for use as a backup to such G-V Transponders, regardless of
whether the failure to make Delivery is HCG's Fault.
(b) Except where there has been a Delivery Failure of Galaxy V and
HCG has commenced to construct a replacement for such failed
Satellite, Buyer shall have the right to cancel its obligations to
purchase all of its undelivered Transponders at any time prior to
Delivery of Galaxy V if an event occurs which makes it physically
impossible for HCG to manufacture or to launch such Satellite (with
Buyer's Transponders placed thereon) on or before December 31, 1994,
by giving written notice to HCG within thirty (30) days of such
event.
(c) In the event of a Delivery Failure, Buyer's right to terminate
shall be governed by Section 4.06(c), herein.
(d) "HCG's Fault" shall mean a failure primarily caused by HCG's
negligence or intentional breach of its obligations under this
Agreement and not excused by a force majeure event (as defined in
Section 11).
(e) If Buyer terminates its obligations as to Buyer's Transponders
due to the failure to make Delivery as set forth in this Section 10
(the "Terminated Transponders"), then Buyer shall be entitled to a
full refund, without interest, of all payments made for each such
Terminated Transponder, less any payments made by HCG to it on
account of such Terminated Transponders pursuant to
16
other provisions of this Agreement, and Buyer and HCG shall have no
further obligations to each other as to each such Terminated
Transponder.
(f) Buyer shall notify HCG of its intent to terminate its
obligations pursuant to this Section 10.01 within thirty (30) days
of the date which triggers such right.
10.02 Termination by HCG. Notwithstanding anything else set forth in this
-------------------
Agreement, HCG may terminate this Agreement if Buyer shall have failed to pay
any amount due and payable pursuant to the provisions of Section 3, and Buyer
has been given written notice by HCG of said failure and Buyer shall have failed
to pay the amount due and payable within thirty (30) business days after HCG has
given such notice to Buyer. Any late payments by Buyer to HCG shall be with
interest calculated at the rate set forth in Section 20.01, payable wit the
amount due and calculated from the date payment was due until the date it is
received by HCG.
10.03 HCG's Right to Sell if Non-Payment. If, for any reason whatsoever,
----------------------------------
Buyer does not make the payments in the amounts and on the dates set forth in
Section 3 and Buyer fails to cure such default as set forth in Section 10.02,
then, in addition to all of its other remedies at law or in equity, HCG shall be
entitled to Transfer (as defined in Section 6.08) Buyer's Transponders
immediately to whomever HCG sees fit. Buyer shall not be entitled to any
equitable relief as a result thereof, and Buyer's exclusive remedy shall be
limited to recovery of any payments made by it to HCG, without interest, less
any claim HCG has against Buyer by reason of such Buyer's default.
10.04 Prompt Repayment. All refunds provided for in this Section 10 to be
----------------
made by HCG shall be made within fifteen (15) business days of receipt by HCG of
notice of termination by Buyer, and any late payment by HCG to Buyer shall be
with interest calculated at the rate set forth in Section 20.01, payable with
the amount due and calculated from the date payment was due until the date is
received by Buyer.
10.05 Termination of Buyer or HCG. Notwithstanding anything else set forth
----------------------------
in this Agreement, either Buyer or HCG may terminate its obligations under this
Agreement as to Transponders on Galaxy V if, prior to Delivery, the FCC shall
have ordered the placement of Galaxy V into an orbital position further east
than 89/./ or further west than 137/./, and such order shall have become a Final
Order, and the parties are unable to reconstitute this Agreement pursuant to
Section 5.03. As used herein, an order of the FCC becomes a "Final Order" when
the FCC's action is no longer subject to administrative or judicial
reconsideration, rehearing, review, stay, appeal or other similar actions which
could be filed with the FCC or with any court having jurisdiction to review said
action.
11. FORCE MAJEURE
-------------
11.01 Failure to Delivery. Any failure or delay in the performance by HCG
-------------------
of its obligations to Deliver any Transponders shall not be a breach of this
Agreement if such failure
17
or delay results from any acts of God, governmental action (whether in its
sovereign or contractual capacity) or any other circumstances reasonably beyond
the control of HCG, including, but not limited to, weather or acts or omissions
of Buyer or any third parties (excluding the Xxxxxx Aircraft Company and all of
its direct and indirect subsidiaries and any other affiliates of HCG or the
Xxxxxx Aircraft Company with whom HCG or the Xxxxxx Aircraft Company contracts
for any components of the Two Satellites or any services with respect thereto).
Nothing in this Section, however, shall be deemed to alter Buyer's absolute
rights to terminate this Agreement as set forth in Section 10.01.
11.02 Failure of Performance. Any failure in the performance of the
----------------------
Transponders, once Delivered, shall not be a breach of this Agreement if such
failure results from acts of God, governmental action (whether in its sovereign
or contractual capacity) or any other circumstances reasonably beyond the
control of HCG, including, but not limited to, receive earth station sun outage,
weather or acts or omissions of Buyer or any third parties (excluding the Xxxxxx
Aircraft Company all of its direct and indirect subsidiaries, and all parties
with whom HCG or Xxxxxx Aircraft Company and all of its direct and indirect
subsidiaries contract for the manufacture, construction, launch and operation of
the Satellites or any components thereof), provided, however, that this
provision shall not excuse HCG's obligations to provide Transponder Spares or
Reserve Transponders, to the extent available and technically feasible, to
satisfy its obligations as set forth in Sections 4 and 9.
12. LIMITATION OF LIABILITY/BREACH OF WARRANTY
------------------------------------------
12.01 Liability of HCG. If (i) any one or more of Buyer's Transponders
----------------
fails to meet the Transponder Performance Specifications during the Warranty
Period, (ii) such failure is deemed to be a Confirmed Failure (as defined in
Section 12.02), and (iii) HCG is unable to furnish the necessary Transponder
Spare or Reserve Transponder as a substitute for Buyer's Transponder, pursuant
to Section 9. then such Transponder shall be deemed to be a "Failed
Transponder," and Buyer, unless HCG is excused by an event set forth in Section
11.02, shall be entitled to repayment as set forth in forth in Section 12.03.
HCG shall have the burden of proving the occurance of an event set forth in
Section 11.02.
12.02 Confirmed Failure. A Buyer's Transponder stall be deemed to have
-----------------
suffered a "Confirmed Failure" if (a) it fails to meet the Transponder
Performance Specifications for a cumulative period of more than ten hours during
any consecutive thirty (30) day period, (b) twenty (20) or more "outage units'
(as defined below,) occur within a consecutive thirty (30) day period, or (c) it
fails to meet the Transponder Performance Specifications for any period of time
under circumstances that make it clearly ascertainable or predictable
technically that the failure set forth in either (a) or (b) of this Section will
occur. An "outage unit" shall mean the failure of Buyer's Transponder(s) to
meet the Transponder Performance Specifications for fifteen (15) minutes or more
in one day. Buyer shall five HCG immediate notification of any such failure, as
soon after commencement of any such failure as is reasonably possible, and of
the relevant facts concerning such failure. Upon HCG's verification that a
Transponder(s) has suffered a Confirmed Failure, such failure shall be deemed to
have commenced upon receipt by HCG of notification from Buyer, or HCG's actual
knowledge, whichever first occurs, of
the Confirmed Failure. As used herein, the term "day" shall mean a 24-hour
period of time commencing on 12:00 Midnight Eastern Time.
12.03 Repayment for Failed Transponder. For each of Buyer's Transponders
--------------------------------
for which repayment is owing hereunder, HCG shall pay to Buyer, without
interest, an amount equal to the product of a fraction, the numerator of which
is the number of days from the date of such failure until the cad of the
Warranty Period and the denominator of which is the total number of days in the
Warranty Period, multiplied by the Base Price for such Transponder as set forth
in Section 3. Concurrently with payment to Buyer of such repayment, Buyer shall
return title and ownership of said Transponder to HCG. In addition, if the
performance of Buyer's Transponder is such that, while it fails to meet the
Transponder Performance Specifications, its performance is nonetheless of some
value to Buyer, then prior to accepting repayment calculated as aforesaid, Buyer
shall have the right to negotiate with HCG to determine if there is a mutually
agreeable reduced price upon which Buyer is willing to keep its Transponder.
Any such agreement reached by Buyer and HCG shall constitute a new agreement,
independent of this Agreement.
12.04 Limitation of Liability.
-----------------------
(a) ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR
USE, ARE EXPRESSLY EXCLUDED AND DISCLAIMED EXCEPT TO THE EXTENT
SPECIFICALLY PROVIDED FOR IN SECTION 6.02, ABOVE. IT EXPRESSLY IS AGREED
THAT HCG'S SOLE OBLIGATIONS AND BUYER'S EXCLUSIVE REMEDIES FOR ANY CAUSE
WHATSOEVER ARISING OUT OF OR RELATING TO THIS AGREEMENT AND/OR THE
TRANSACTIONS CONTEMPLATED HEREBY ARE LIMITED TO THOSE SET FORTH IN SECTIONS
4, 6.09 (IN THE LEASE ADDENDUM HERETO) 9, 10 AND 12, HEREOF, AND ALL OTHER
REMEDIES OF ANY KIND ARE EXPRESSLY EXCLUDED.
(b) In no event shall HCG be liable for any incidental or
consequential damages, whether foreseeable or not, occasioned by any defect
in the Transponders, delay in Delivery of the Transponders, failure of the
Transponder to perform or any other cause whatsoever. HCG makes no
warranty, express or implied, to any other person or entity concerning the
Transponders and Buyer shall defend and indemnify HCG from any claims made
under any warranty or representation by Buyer to any third party. The
limitations of liability set forth herein shall also apply to the Xxxxxx
Aircraft Company (the manufacturer of the Satellite and the Transponders)
and all affiliates thereof.
(c) Notwithstanding the limitations of the first sentence of section
12.04(a) above, Buyer and HCG each shall have the right to obtain
injunctive relief, if necessary, in order to prevent the other party from
willfully breaching its obligations
19
under this Agreement or to compel the other party to perform its
obligations under this Agreement.
12.05 Obligations of Buyer to Cooperate. If any of Buyer's Transponders
---------------------------------
fails to meet the Transponder Performance Specifications, then Buyer shall use
reasonable efforts to cooperate and aid HCG in curing such failure, provided
that such efforts can be done at minimal or no cost to Buyer.
(a) These obligations of Buyer shall include, but not be limited to,
the following:
(i) If there is a problem which can be compensated for by
increasing the power of its transmission to the Buyer's
Transponder, then Buyer shall do so, at HCG's cost and expense,
to the extent it can _____ existing equipment, provided, however,
that HCG shall not be able to require Buyer to increase the power
of its transmission if, by doing so, it would cause interference
with other Transponders on such Satellite which is prohibited by
Section 7.02 of this Agreement, or interference with any other
satellite; and
(ii) Permitting HCG, at HCG's cost and expense, to upgrade
Buyer's equipment, provided that Buyer shall be entitled to
select and install such equipment and determine its configuration
in accordance with its own existing operating procedures and
technical requirements, and in accordance with applicable laws
and regulations.
(b) HCG shall give notice to Buyer if and when it requires the increase of
power of the transmission of any other Owner pursuant to such Owner's obligation
equivalent to this Section 12.05. HCG shall also give notice to Buyer when it
acquires knowledge of any other Transponder user uplinking at power levels which
might cause interference with Buyer's Transponders. If, after such increase in
power, a Buyer's Transponder(s) no longer meets its Transponder Performance
Specifications, HCG shall promptly take steps to reduce interference, if any,
prohibited by Section 7.02.
(c) Buyer's priority for the use of Transponder Spares or Reserve
Transponders under Section 9 shall be determined at the time that its
Transponder would otherwise have become a Failed Transponder without Buyer's
cooperation under this Section 12.05.
12.06 Scheduled Delivery Date. The only consequence of HCG's failure to
-----------------------
meet the Scheduled Delivery Dates shall be as set forth in Sections 4.04, 4.10
and 4.12.
13. LIMITATIONS ON TRANSFER BY BUYER
--------------------------------
13.01 Transfers Generally. Except as specifically provided for in this
-------------------
Agreement, neither Buyer nor HCG shall assign its rights under this Agreement
except with the written
20
[*] CONFIDENTIAL TREATMENT REQUESTED
consent of the other, which consent may be given or withheld in such party's
sole and absolute discretion, except that HCG shall have the right to assign any
or all of its rights of obligations hereunder to any affiliate (as defined in
Section 13.04) of HCG or its parent corporation, the Xxxxxx Aircraft Company.
Buyer shall not be permitted to Transfer any all its rights under this
Agreement to purchase Transponders, or any part thereof, to any third party
prior to Delivery of the Transponders except as otherwise specified in this
Agreement or with the written consent of HCG, which consent may be given or
withheld in HCG's sole and absolute discretion. Notwithstanding the foregoing,
on or after the Execution Date: (a) Buyer may immediately Transfer or assign its
rights under this Agreement and to all or any portion of Buyer's Transponders
hereunder to any "Financing Entity," (as defined below) which shall take such
rights or such Transponders subject to the terms of this Agreement and the TI&C
Service Agreement, pursuant to such transfer documents as HCG shall reasonably
request, consistent with its past practice for sale-leasebacks for Galaxy I, II
and III; provided that no such Transfer or assignment shall relieve Buyer of any
of its obligations hereunder and under the TT&C Service Agreement; and/or (b)
any Financing Entity to whom any right under this Agreement or any of Buyer's
Transponders have been transferred pursuant to clause (a) hereof, may, in the
exercise of its remedies, if Buyer shall default in its obligations under the
applicable financing agreements, transfer or assign such rights or such
Transponders to any person or entity who assumes all of Buyer's obligations
hereunder and under the TT&C Service Agreement, and who executes such transfer
documents as HCG shall reasonably request, consistent with its past practices
for Galaxy I, II and III. The right of first refusal in favor of HCG pursuant to
Section 13.03 hereof will not apply to any initial Transfer permitted by this
Section 13.01, i.e., a Transfer to a Financing Entity, but will apply to any
subsequent Transfer by any such transferee. In no circumstance shall any
Transfer under this Section 13.01 relieve Buyer of its Agreed Uses obligations
under Section 7.01 and its other use obligations as set forth in Section
7.01(a). As used herein, "Financing Entity" shall mean an entity which lends
funds to Buyer or which acts on behalf of entities which lend funds to Buyer to
enable it to purchase Buyer's Transponders or who agrees to purchase Buyer's
Transponders and lease them back to Buyer in a "sale-leaseback" arrangement.
13.02 Transfer After Delivery. After Delivery, Buyer may Transfer any of
-----------------------
Buyer's Transponders, and the rights and obligations set forth herein, with
respect to such Buyer's Transponder to any third party only if, prior to such
Transfer, (i) such transferee executes a document, in form and substance
satisfactory to HCG, by which such transferee assumes all of Buyer's obligations
under the Agreement and under the TT&C Service Agreement (including, without
limitation, Buyer's obligations concerning Agreed Uses, its other use
obligations as set forth in Section 7.01(a) and the right of first refusal set
forth in Section 13.03); and (ii) Buyer has satisfied its obligation under
Section 13.03 and, if applicable, HOG has not exercised its repurchase right
under Section 13.03.
13.03 [*]
(a) Except as set forth in Section 13.03(c), if Buyer desires to [*]
any of its Transponders [*] (as defined in Section 13.03(b)), then Buyer
shall first offer by written notification to sell such Transponder(s) to
21
[*] CONFIDENTIAL TREATMENT REQUESTED
[*] of (i) [*] reduced by [*] which had expired, or (ii) the price and
terms for which [*] to [*] HCG shall have [*] to respond to such written
offer.
(b) [*] shall mean, as to each of Buyer's Transponders, that period
which ends at the first to occur of either (i) the end [*]
(c) The [*] in this Section shall not apply to any [*] to any [*]
Buyer, provided that such [*] satisfies the obligations set forth in
Section 13.02.
13.04 Affiliate. As used in this Agreement, "affiliate" shall mean any
---------
[*] or other entity controlling or controlled by or under common control with
Buyer or HCG, as the case may be.
14. ENFORCEMENT OF USAGE RESTRICTIONS
---------------------------------
14.01 Buyer's Restrictions. Buyer acknowledges that HCG alone shall have
--------------------
the right, in its sole and absolute discretion, exercised in good faith, to
determine whether a given use of the Buyer's Transponders constitutes an Agreed
Use or Cable Entertainment Services, and, based on that determination, to decide
whether to enforce the requirements of Section 7.01.
14.02 HCG's Enforcement Rights. All other Transponder Owners may obligate
------------------------
themselves to HCG to use the Transponders only for an "agreed use," and shall
obligate themselves to use the Transponders primarily for Cable Entertainment
Services (as set forth in Section 7.01(c)). Buyer further acknowledges that HCG
alone shall have the right, in its sole discretion, exercised in good faith, to
determine whether a given use by another Transponder owner or transferee of such
Owner constitutes an "agreed use" (as defined in such Owner's Transponder
Purchase Agreement) or a Cable Entertainment Service, and, based on that
determination, to decide whether to enforce those provisions in such Owner's
Transponder Purchase Agreement which are equivalent to Section 7.01 herein.
15. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS
------------------------------------------------------------
15.01 Progress Reports. Commencing ninety (90) days after the Execution
----------------
Date and continuing until Delivery, HCG shall furnish to the Buyer on a monthly
basis a written progress report on the status of the construction of the Two
Satellites and a statement containing an explanation of material details,
including HCG's projected Scheduled Launch Dates and projected dates of
Delivery, variances from performance specifications and any remedial actions
taken. HCG shall take reasonable steps to keep Buyer informed periodically of
communications
22
to HCG from the FCC or any other governmental authority which materially affect
Buyer and concern HCG, the Two Satellites and the Transponders or their use, and
shall promptly deliver copies to Buyer of any such written communications.
15.02 Inspection Rights of Buyer. Buyer shall have the right to inspect
--------------------------
Galaxy V and its Transponders during construction and prior to launch, upon
reasonable notice to HCG and during normal business hours, and shall have the
right to be present during ground and in-orbit testing. HCG shall give Buyer
reasonable notice of the commencement of acceptance testing as set forth in
Section 4.03, above. Buyer shall be supplied with the test data from such
acceptance tests.
15.03 Access to Work in Progress and Selection of Transponders. Prior to
--------------------------------------------------------
Delivery, except for documentation and information regarded by HCG as
proprietary or trade secrets, relevant and material work in progress, including
test data and documentation generated through HCG's effort pursuant to this
Agreement, shall be subject to examination and inspection by Buyer. To the
extent that the data and documentation to be provided by Buyer hereunder are of
a type normally retained by HCG, and are not to be delivered to Buyer under this
Agreement, HCG shall make them available to Buyer at it request for examination
at a location designated by HCG. Subject to the provision set forth above, HCG
shall also deliver copies of test data and other data generated from the testing
and performance of the Satellite and the Buyer's Transponders to Buyer at any
time on Buyer's request and at Buyer's expertise. HCG will also conduct ground
tests of the G-V Transponders. From the Transponder ground test results
furnished to Buyer and other Owners, Buyer shall promptly select, in the order
set forth in Exhibit E (the priority list), its particular Transponder(s) for
Delivery; provided, however, that HCG shall, prior to Buyer's selection of its
Transponder(s), designate which Transponders shall be Reserve Transponders.
Such selection shall be made within three (3) days of HCG's notification to
Buyer of such test results and the identification of those Transponders which
have not yet been selected. HCG shall furnish data necessary to determine
whether the Transponders satisfy or exceed the applicable Transponder
Performance Specifications in order to facilitate Buyer's selection of its
Transponder(s). If the in-orbit test results vary from the ground test results,
then Buyer shall have the right to substitute Transponders at Buyer's
discretion, but only for uncommitted Transponders on the same Satellite (i.e.,
Transponders that have not been sold, leased or otherwise committed by HCG to a
third party).
15.04 After Delivery Reports. After Delivery, Buyer shall receive monthly
----------------------
reports on the overall performance of Galaxy V and Galaxy Backup in the form of
the Galaxy Satellite status reports similar to the Galaxy I Satellite Services
Monthly Report, plus information furnished to insurer. Anomalous operations
shall be reported to Buyer as soon as possible.
16. CONFIDENTIALITY AND PRESS RELEASES
----------------------------------
16.01 Confidential Information. HCG and Buyer shall hold in confidence the
------------------------
Agreement and all Exhibits, including the financial terms and provisions hereof
and all information received pursuant to Section 15, and HCG and Buyer hereby
acknowledge and agree that all information related to this Agreement, not
otherwise known to the public, is confidential and proprietary and is not to be
disclosed to third persons without the prior
23
written consent of both HCG and Buyer. Neither HCG, nor Buyer, shall disclose
such information to any third party (other than to officers, directors,
employees and agents of HCG and Buyer, each of whom is bound by this Section
16.01) except:
(a) to the extent necessary to comply with law or the valid order of a
governmental agency or court of competent jurisdiction, or to satisfy its
obligations to other Owners of Transponders; provided, however, that the
party making such disclosure shall seek confidential treatment of said
information;
(b) as part of its normal reporting or review procedure to regulatory
agencies, its parent company, its auditors and its attorneys;
(c) in order to enforce its rights and perform its obligations
pursuant to this Agreement;
(d) to the extent necessary to obtain appropriate insurance, to its
insurance agent, provided that such agent agrees to the confidential
treatment of such information; and
(e) to the extent necessary to negotiate clauses that will be common
to all Transponder Purchase Agreements, including, but not limited to,
disclosures pursuant to Section 6.07 of this Agreement, and the equivalent
to Section 6.07 in the Transponder Purchase Agreement of any other Owner.
16.02 Press Releases. The parties agree that no press release relating to
--------------
this Agreement shall be issued without the approval of both parties. Both
parties agree, however, that a press release relative to this Agreement and
including Buyer's Agreed Uses shall be simultaneously released within five (5)
business days of the Execution Date.
17. DISPOSITION OF SATELLITE
------------------------
17.01 Post-Warranty Period. After the Warranty Period and until the
--------------------
earlier of such time as (i) the remaining fuel on board Galaxy V is less than
four (4) pounds, or (ii) Galaxy V has fewer than eighteen (18) Transponders
capable of meeting its Transponder Performance Specification, HCG shall continue
to make available to Buyer, on the terms and conditions contained herein,
Transponder Spares and Reserve Transponders.
17.02 Disposition of Satellite. At the earlier of the time as (i) the
------------------------
remaining fuel on board Galaxy V is less than four (4) pounds, or (ii) Galaxy V
has fewer than eighteen (18) Transponders capable of meeting its Transponder
Performance Specification, HCG in its sole discretion, may remove Galaxy V from
its assigned orbital location and have no further obligations to Buyer under
this Section 17 or this Agreement; provided, however, that until HCG so removes
Galaxy V, HCG shall continue to make available to Buyer its Transponder or
Transponders, Transponder Spares and Reserve Transponders as provided for in
this Agreement. HCG will, to the extent possible, provide Buyer with ninety
(90) days notice
24
prior to the disposition of Galaxy V pursuant to this Section 17.02.
Notwithstanding anything to the contrary in Section 17.02, if any payment,
refund, or other performance obligation of either party has arisen prior to
Galaxy V being removed from its assigned orbital location pursuant to Section
17.02, then such party shall still be responsible to perform each such
obligation.
18. DOCUMENTS
---------
Each party hereto agrees to execute and, if necessary, to file with
the appropriate governmental entities, such documents as the other party hereto
shall reasonably request in order to carry out the purposes of this Agreement.
19. CONFLICTS
---------
In the case of a conflict between the provisions of this Agreement and
any Exhibit other than Exhibits B, C and G, the provisions of this Agreement
will prevail.
20. MISCELLANEOUS
-------------
20.01 Interest. The rate of interest referred to herein shall be 12% per
--------
annum, or the highest legal permissible rate of interest, whichever is lower,
and all interest or discounting shall be compounded on a yearly basis. "Pro-
rata" shall mean an allocation on a straight line basis based on number of days.
All present value analyses shall use a 12% annual discount rate.
20.02 Applicable Law and Entire Agreement. The existence, validity,
-----------------------------------
construction, operation and effect of this Agreement and the Exhibits hereto,
shall be determined in accordance with and be governed by the laws of the State
of California. This Agreement and Exhibits hereto, along with the TT&C Service
Agreement, dated as of the even date herewith, constitutes the entire agreement
between the parties, and supersedes all previous understandings, commitments or
representations concerning the subject matter. The parties each acknowledge
that the other party has not made any representations other than those which are
contained herein. This Agreement may not be amended or modified in any way, and
none of its provisions may be waived, except by a writing signed by an
authorized officer or the party against whom the amendment, modification or
waiver is sought to be enforced.
20.03 Notices. All notices and other communications from either party to
-------
the other hereunder shall be in writing and shall be deemed received upon actual
receipt when personally delivered, upon actual receipt if sent by facsimile or
upon delivery after being deposited in the United States mails, postage prepaid,
certified or registered mail, addressed to the other party as follows:
25
TO HCG:
If by mail: Xxxxxx Communications Galaxy, Inc.
Post Office Box 00000
Xxxxxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President-Galaxy
cc: Vice President & Legal Counsel
If by FAX: (000) 000-0000
Attention: Senior Vice President-Galaxy
cc: (000) 000-0000 Vice President & Legal
Counsel
If by personal
delivery to its
principal place of 0000 Xxxxx Xxxxxx
business at: Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President-Galaxy
cc: Vice President & Legal Counsel
TO BUYER:
If by mail: International Family Entertainment, Inc.
0000 Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, President
cc: Xxxxx X. Xxxxxxx, Vice President & General
Counsel
If by FAX: 000-000-0000
Attention: President, Xxxxxxx Xxxxxxxxx
cc: Vice President and General Counsel,
Xxxxx X.Xxxxxxx
If by personal
delivery to its
principal place of
business at: International Family Entertainment, Inc.
0000 Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, President
cc: Xxxxx X. Xxxxxxx, Vice President & General
Counsel
26
All payments to be made under this Agreement, if made by mail, shall be deemed
to have been made on the date of receipt thereof. The parties hereto may change
their addresses by giving notice thereof in conformity with this Section 20.03.
20.04 Severability: Nothing contained in this Agreement shall be construed
------------
so as to require the commission of any action contrary to law, and wherever
there is any conflict between any provision of this Agreement and any statute,
law, ordinance, order or regulation, such statute, law, ordinance, order or
regulation shall prevail, provided, however, that in such even the provisions of
this Agreement so affected shall be curtailed and limited only to the extent
necessary to permit compliance with the minimum legal requirement, and no other
provisions of this Agreement shall be affected thereby and all such other
provisions shall continue in full force and effect.
20.05 Taxes. If any property or sales taxes are asserted against HCG
-----
after, or as a result of, Delivery, by any local, state, national or
international, public or quasi-public governmental entity, in respect of Buyer's
Transponders or the sale thereof to Buyer, Buyer shall be solely responsible for
such taxes. If any taxes, charges or other levies are asserted by reason of the
use of the point in space or the frequency spectrum at that point in space in
which the Satellite containing Buyer's Transponders is located, or the use or of
such Satellite (excluding any FCC license fee imposed on the Satellite itself,
as compared to the Transponders, which license fee shall be paid by HCG), and
such taxes are not specifically allocated among the various components of such
Satellite, then HCG, Buyer and the other Owners of such Transponders shall each
pay a proportionate amount of such taxes based on the number of Transponders
each of them owns.
20.06 Successors. Subject to Section 13, this Agreement shall be binding
----------
on and inure to the benefit of any successors and assigns of the parties,
provided that no assignment of this Agreement shall relieve either party hereto
of its obligations to the other party. Any purported assignment by either party
not in compliance with the provisions of this Agreement shall be null and void
and of no force and effect.
20.07 Headings. The descriptive headings of the several sections and
--------
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
20.08 Survival of Representatives and Warranties. All representations and
------------------------------------------
warranties contained herein or made by HCG or Buyer in connection herewith shall
survive any independent investigation made by HCG or Buyer.
20.09 No Third-Party Beneficiary. The provisions of this Agreement are for
--------------------------
the benefit only of the parties hereto, and no third party may seek to enforce,
or benefit from, these provisions, except that both parties acknowledge and
agree that the provisions of Sections 7.02, 8, 9.01, 9.02, 9.03 and 9.04, are
intended for the benefit of both HCG and all other Owners. Both parties agree
that any other such Owner shall have the right to enforce, as a third-party
beneficiary, the provisions of Sections 7.02, 8, 9.01, 9.02, 9.03 and 9.04,
27
against Buyer directly, in an action brought solely by such other Owner, or may
join with HCG or any other Owner, in bringing an action against Buyer for
violation of such Sections.
20.10 Non-Waiver of Breach. Either party hereto may specifically waive any
--------------------
breach of this Agreement by the other party, provided that no such waiver shall
be binding or effective unless in writing and no such waiver shall constitute a
continuing waiver of similar or other breaches. A waiving party, at any time,
and upon notice given in writing to the breaching party, any direct future
compliance with the waived term or terms of this Agreement, in which event the
breaching party shall comply as directed from such time forward.
20.11 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the parties has duly executed and delivered
this Agreement as of the date and year first written above.
XXXXXX COMMUNICATIONS INTERNATIONAL FAMILY
GALAXY, INC. ENTERTAINMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------- -----------------------------
Its: Vice President Its: Vice President
28
