DTH OPTION PURCHASE AGREEMENT
This DTH Option Purchase Agreement (this "Agreement"), dated
September 20, 1996, between PanAmSat Corporation, a Delaware corporation
("PAS"), Grupo Televisa, S.A., a Mexican corporation ("Televisa") and Satellite
Company, L.L.C., a Nevada Limited Liability Company ("S Company").
A. PAS and Televisa have entered into a DTH System in Latin America
Memorandum of Understanding dated as of March 27, 1995 (the "Original
MOU"), as revised pursuant to a Revised DTH System in Latin America
Memorandum of Understanding of even date herewith (the "Revised MOU").
Pursuant to Section 2.4.1 of the Original MOU and Section 1.1 of the
Revised MOU, and pursuant to oral understandings, PAS has obligations
or rights to purchase (such agreements or options to purchase, the "DTH
Options"), subject to fulfillment of its indenture obligations, equity
ownership in a company or companies formed to sell program services to
consumers in the Americas and the Iberian peninsula.
B. Concurrently with the execution and delivery of this Agreement, PAS is
entering into an Agreement and Plan of Reorganization (the
"Reorganization Agreement") with Xxxxxx Communications, Inc. ("HCI"),
Xxxxxx Communications Galaxy, Inc., Xxxxxx Communications Satellite
Services, Inc., Xxxxxx Communications Services, Inc., Xxxxxx
Communications Carrier Services, Inc., Xxxxxx Communications Japan,
Inc. and Magellan International, Inc. ("Newco"), pursuant to which,
among other things, Newco will acquire the existing businesses of
certain subsidiaries of HCI that together comprise the Galaxy Business
(as defined in the Reorganization Agreement) and the business of PAS.
C. It is a condition to the closing under the Reorganization Agreement
that PAS dispose of the DTH Options.
In consideration of the foregoing premises and the agreements,
covenants and conditions set forth below, the parties agree as follows:
1. Sale of DTH Option.
1.1 Upon the terms and subject to the conditions contained
herein, at a closing (the "Closing") occurring substantially concurrently with
the payment by Newco of consideration pursuant to Section 1.2 of the Stock
Contribution and Exchange Agreement of even date herewith between Televisa, S
Company, Newco and Xxxxxx Communications, Inc., PAS will sell, convey, transfer,
assign and deliver (i) unless the proviso to Section 1.3 hereof is applicable,
at Televisa's option, to Televisa and/or a designee or designees of Televisa, or
(ii) only if the proviso to Section 1.3 hereof is applicable, at S Company's
option, to S Company and/or a designee or designees of S Company, all of PAS's
right, title and interest in and to the DTH Options (collectively, the "PAS DTH
Option Sale").
1.2 Upon the terms and subject to the conditions contained
herein, at the Closing, as consideration for the PAS DTH Option Sale, subject to
Section 1.3 hereof, Televisa shall pay and/or cause to be paid to PAS the sum of
U.S. $225,000,000 (the "DTH Option Amount").
1.3 To effect the PAS DTH Option Sale, at the Closing (a) PAS
shall assign, convey, transfer and sell (i) unless the proviso to this Section
1.3 is applicable, at Televisa's option, to Televisa and/or a designee or
designees of Televisa, or (ii) only if the proviso to this Section 1.3 is
applicable, at S Company's option, to S Company and/or a designee or designees
of S Company, the DTH Options free and clear of any claim, lien, pledge, option,
charge, security interest, encumbrance or other rights of third parties of any
nature whatsoever, and (b) Televisa shall pay and/or caused to be paid an amount
in cash equal to the DTH Option Amount to PAS by wire transfer of immediately
available funds to an account designated by PAS; provided, that if Televisa is
otherwise unable to pay and/or caused to be paid the DTH Option Amount to PAS at
the Closing, then S Company shall acquire and/or cause to be acquired by a
designee or designees of S Company the DTH Options, and S Company shall pay
and/or caused to be paid by a designee or designees of S Company the DTH Option
Amount to PAS.
1.4 (a) In the event that the proviso to Section 1.3 hereof is
not applicable, unless otherwise provided in a written notice by Televisa to PAS
at the Closing, PAS shall sell, convey, transfer, assign and deliver the DTH
Options to Televisa at the Closing.
(b) Only in the event that the proviso to Section 1.3 hereof
is applicable, unless otherwise provided in a written notice by S Company to PAS
at the Closing, PAS shall sell, convey, transfer, assign and deliver the DTH
Options to S Company at the Closing.
2. Representations, Warranties, Covenants and Agreements.
2.1 PAS hereby represents and warrants to Televisa, S Company
and their designees, and each of Televisa and S Company (on behalf of each of
them and their designees, if any) hereby represents and warrants to PAS, that
(i) such party has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to effect
the transactions contemplated hereby, (ii) the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of such party, (iii) this Agreement has been duly executed and
delivered by such party, and assuming that this Agreement constitutes the valid
and binding agreement of the other party hereto, constitutes a valid and binding
obligation of such party enforceable in accordance with its terms except that
the enforcement hereby may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (iv) no consent, approval, order or authorization of, or registration,
declaration or filing with, notice to, or permit from any legislative,
executive, judicial, regulatory or other governmental or quasi-governmental
authority, instrumentality or body, whether domestic or foreign, local, state,
federal or other, including, without limitation, any administrative agency,
commission or court, or other public or private third party, is required by or
with respect to such party in connection with the execution and delivery by such
party of this Agreement or the consummation by such party of the transactions
contemplated hereby.
2.2 Each of the parties hereto hereby agrees that it will
cooperate with one another and endeavor in good faith to take all actions
required in connection with the consummation of the transactions contemplated by
this Agreement.
3. Binding Effect.
This Agreement is a binding agreement between the parties, and
may be amended or modified only by a written instrument executed by the parties.
This Agreement constitutes the entire understanding and agreement of the parties
with respect to the matters described herein and all prior agreements and
understandings, whether written or oral related thereto, are merged herein and
superseded hereby, except as set forth in Section 9 below.
4. No Third Party Beneficiaries.
Nothing contained in this Agreement is intended to confer on
any person or entity, other than the parties hereto, any rights, remedies or
obligations.
5. Governing Law.
This Agreement will be governed by and construed in accordance
with the laws of the State of New York, without giving effect to principles of
conflicts of laws.
6. Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall constitute an original agreement.
7. Termination.
This Agreement may be terminated at any time prior to the
Closing by PAS or Televisa (the date of such termination being referred to as a
"Termination Date") if for any reason the Reorganization Agreement shall have
been terminated in accordance with its terms. In the event of the termination of
this Agreement as provided in the preceding sentence, written notice thereof
shall forthwith be given to the other party and this Agreement shall forthwith
become void and there shall be no liability on the part of either party hereto
except to the extent that such termination results from the breach by such party
hereto of any of its representations or warranties, or of any of its covenants
or agreements, in each case, as set forth in this Agreement.
8. Further Rights.
Notwithstanding anything contained herein to the contrary,
upon the termination of this Agreement pursuant to Section 7, Televisa may
extend this Agreement for a period of up to 12 months following the Termination
Date (the "Extension Period") by written notice to PAS given within the
Extension Period. Upon such extension, the transactions contemplated herein
shall close prior to the expiration of the Extension Period, as the same may be
further extended as provided in clause (b) below, on the terms and conditions
set forth herein, provided that (a) the $225 million purchase price specified
herein shall be increased by an amount equal to interest at the rate of 10% per
annum from the Termination Date until the payment of the purchase price, and (b)
if PAS enters into an agreement to effect a business combination within the
Extension Period and if Televisa has committed to purchase the DTH Options in
connection with such business combination, the closing of the purchase and sale
may be adjourned, at Televisa's option, until the consummation of such business
combination.
9. Termination of Agreements.
Upon the consummation of the purchase by Televisa or its
designee of the DTH Options as provided herein, all rights and obligations of
the parties under the Original MOU and the Revised MOU shall, except as
expressly provided below, be terminated and extinguished and neither party shall
have any further obligation to the other. Notwithstanding the immediately
preceding sentence, the provisions of Section 2 of the Revised MOU shall not be
terminated or extinguished and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
GRUPO TELEVISA, S.A.
By: /s/ Xxxxxxxxx Xxxxxx White
--------------------------------
Name: Xxxxxxxxx Xxxxxx White
Title: Executive Vice President
SATELLITE COMPANY, L.L.C.
By: /s/ Xxxxxxxxx Xxxxxx White
--------------------------------
Name: Xxxxxxxxx Xxxxxx White
Title: Authorized Signatory
PANAMSAT CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
