Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
Exhibit 10.52
EXECUTION COPY
TRANSPONDER SERVICE AGREEMENT
This Agreement (the "Agreement") is entered into this 30th day of
April, 1998, by and between PanAmSat International Systems, Inc., a Delaware
corporation, formerly known as PanAmSat Corporation ("PanAmSat") and Corporacion
de Radio y Television del Norte de Mexico, S. A. de C.V., a sociedad anonima de
capital variable ("Customer"). This Agreement covers the provision of
twenty-four hour fixed term non-preemptible satellite signal reception and
retransmission service (the "Service") by PanAmSat to Customer from twelve (12)
Ku-band transponders (referred to generally as the "Service Transponders") in
the "Mexico Beam" (identified in Appendix C) of the Atlantic Ocean Region
Satellite referred to by the parties as PAS-5 ("PAS-5" or the "Satellite") that
was constructed by Xxxxxx Space and Communications Company, formerly a division
of Xxxxxx Aircraft Company ("Xxxxxx"). The Service Transponders are more
particularly identified in Appendix A and the Satellite is described in
Appendix B of this Agreement. The Service shall be supplied by PanAmSat in
outerspace. The transponders on the Satellite and the beams in which these
transponders are grouped are referred to as "Transponder(s)" and the "Beam(s),"
respectively.
This Agreement implements that certain letter agreement dated February
29, 1996, by and among PanAmSat, The News Corporation Limited ("News"), Globo
Comunicacoes e Participacoes ("Globo") and Grupo Televisa, S.A. ("Televisa")
(the "Letter Agreement"). For the avoidance of doubt, the parties understand and
agree that the combination of this Agreement, that certain "Second Amended and
Restated Transponder Purchase and Sale Agreement," by and between PanAmSat and
NetSat Servicos Ltda. ("NetSat"), dated as of Xxxxx 0, 0000 (xxx "Xxxxxx
Agreement"), and that certain "Transponder Service Agreement," by and between
PanAmSat and Sky Multi-Country Partners ("Multi-Country Platform"), also dated
as of March 5, 1998 (the "Multi-Country Agreement") have superseded the Letter
Agreement as to all obligations of or to PanAmSat thereunder. This Agreement
constitutes the entire agreement between the parties and supersedes all previous
understandings, commitments, or representations concerning its subject matter.
The date of execution of this Agreement will not be asserted by either
party as being relevant to any matter or cause of action hereunder. Neither the
fact that this Agreement was executed on the date hereof, rather than as of
February 29, 1996, nor the fact that any party may have information available to
it on the former date that it did not have available to it on the latter date,
shall be deemed to constitute a waiver by, or an estoppel of, any party with
respect to any right or remedy that such party might otherwise have had if this
Agreement had been executed on February 29, 1996.
AGREEMENT
In consideration of the foregoing and of the mutual promises set forth
below, PanAmSat and Customer mutually agree as follows:
ARTICLE 1. PROVISION OF SERVICE
1.1 The Service. PanAmSat agrees to provide, and Customer agrees to
accept, the Service. Except as otherwise specifically permitted under this
Agreement, PanAmSat shall not preempt or interrupt Customer's use of the
Service. In no event shall these exceptions be construed so as to permit
PanAmSat to preempt Customer's use of the Service so as to allow PanAmSat to use
the Service Transponders to provide Transponder capacity for itself or for
another customer.
1.2 Intentionally Deleted.
1.3 Intentionally Deleted.
1.4 Covenants on Use. Customer acknowledges and agrees that the
provision of Service that is the subject of this Agreement is being made in
consideration, among other things, of Customer's agreement and promise to use
the Service for particular purposes. In this regard, Customer agrees as follows:
(a) DTH Service. Except as otherwise provided herein, the
Service shall be used to meet the satellite transmission requirements of
Customer's direct to home service, which for purposes of this Agreement, except
for the specific purposes of Section 1.8, means video and audio programming that
is provided on a pay or subscription basis, together with associated audio and
data signals (e.g., authorization codes) and any other direct broadcast or
interactive or multimedia service (including, without limitation, internet
access and video games) and that is intended for direct reception (or by means
of SMATV) by, and is made available primarily to, end user recipients in the
home or business xxx "Xx-xxxx" xxxxxxxxx
0
transponders in the "Territory" ("DTH Service"). Other uses of the Service shall
be permitted to the extent provided under this Section 1.4 and Sections 1.6, and
1.7 below. References in this Agreement to Customer's "transmissions" and,
except where specifically limited to "video," references to Customer's
"programming" shall be deemed to include all permitted video and non-video
applications. As used in this Agreement, the "Territory" means Mexico, the
Dominican Republic, Costa Rica, Cuba, Guatemala, Nicaragua, Honduras, El
Salvador, Puerto Rico, Panama [*************************************] and the
United States, Canada, Belize, the British Virgin Islands, and all other islands
in the Caribbean located in whole or in part north of 12o North Latitude.
"Ku-band" means the frequency band between 10.7 and 17.8 GHz, excluding minor
overlaps of other bands to the extent generally recognized as falling outside
the "Ku-band" designation and also excluding authorizations that may be granted
(on a general applicability basis) for minor portions of the band solely for use
in connection with frequencies located outside of the band.
(b) Customer's DTH Service. As used in this Agreement, the
reference to "Customer's DTH Service" shall be deemed to include any DTH Service
that is owned, operated or managed by Customer or any entity that is directly or
indirectly "Controlled" by a combination of one or more of the "Approved
Participating Companies" that also, directly or indirectly, Control the
Customer. The Approved Participating Companies mean any one or more of the
following companies that directly or indirectly has an equity holding,
investment, or other economic interest in the Customer: News, Televisa,
Tele-Communications International, Inc. ("TINTA"), and/or any of the "Approved
Companies" that are identified in Appendix I. News and Televisa are also
referred to herein as the "Founding Partners." In addition, TINTA may elect
pursuant to Section 18.1 hereof, on notice to PanAmSat to be given no later than
May 4, 1998, to be deemed a Founding Partner. At Customer's request, the list of
Approved Companies may be expanded, subject to PanAmSat's prior written consent,
not to be unreasonably withheld, conditioned, or delayed; provided that, in
appropriate circumstances, PanAmSat may limit its consent to the involvement of
an Approved Company: (i) so that Control of Customer is retained by other
Approved Participating Companies, (ii) to exclude separate programming rights
under Section 1.4(c) below, and/or (iii) to exclude rights to be an assignee
under Section 10.5 of this Agreement. PanAmSat shall make all decisions required
under this paragraph in good faith
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based upon the financial qualifications and programming practices (i.e., with
respect to considerations identified in Section 10.5 below) of a proposed
Approved Company. For purposes of this Agreement, "Control" means voting control
over ordinary business activities (positive or negative) that may be exercised
directly or indirectly. As a condition for their interest in Customer and
participation in Customer's DTH Service, Customer shall require each of the
Approved Participating Companies to agree to and to comply with the terms and
conditions of the Agreement as they relate to them and shall make PanAmSat a
third party beneficiary entitled to enforce such provisions directly against the
Approved Participating Companies. It is understood that Customer's DTH Service
may carry programming provided to it by third parties.
Customer may permit video programming signals (with associated
audio and data signals) that are owned by one of the Founding Partners or their
"Affiliates" and that are being carried on the same Service Transponder as part
of Customer's DTH Service also to be received (the same feed), on an ancillary
basis, by cable head ends, SMATV and MMDS outlets and other non-DTH facilities
that may be developed for the distribution of video programming ("Non-DTH
Outlets"), provided as follows: [**********************************************
********************************************************************************
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**************] The foregoing notwithstanding, [*****************************
*******************************************] in their separate and unrelated
capacity as video programming channel providers that neither Customer nor any
other entity that provides Customer's DTH Service nor their agents or
[*******************************************************************************
********************************************************************************
********************************************************************************
******************] As used in this Agreement, "Affiliate" means, with respect
to any entity (which for this purpose does not include natural persons), any
entity directly or indirectly, through one or more intermediaries, Controlling,
Controlled by, or under common Control with such entity. For purposes of this
paragraph, "Affiliates" of the Founding Partners shall also be deemed to include
(except for purposes of making determinations under clause (iii) that follows)
entities in which all of the following are the case: (i) a Founding
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Partner individually owns, directly or indirectly, at least 25% of the equity of
the entity; (ii) the Founding Partner has a board seat or comparable management
participation in the entity; and (iii) if the entity or its Affiliates has ever
entered into a satellite transponder transaction with PanAmSat, the Founding
Partner has had liability exposure to PanAmSat thereunder, either as a general
partner of the entity or as guarantor (in whole or in part) of the entity's
obligations to PanAmSat.
(c) Non-DTH Use. Customer, each Founding Partner (as long as
it directly or indirectly, owns or has an investment or economic interest in
Customer or in Customer's DTH Service), each Approved Participating Company that
has a minimum 10% voting equity in the Customer, and each entity that is an
Affiliate of any of the foregoing entities is referred to herein as a "Customer
Company." To the extent that the capacity provided by the Service Transponders
exceeds the requirements of the Customer Companies for the satellite
transmission of DTH Service in the [*****] Territory (as they reasonably
determine) and, except as permitted under Section 1.8(c), the Customer Companies
are not using other Ku-band satellite capacity in lieu of the Service
Transponders, to meet such requirements for the [*******] Territory, the
Customer Companies may use the Service Transponders for their own needs with
respect to the transmission of video, audio, data and teletext signals and any
other electronic information, including (without limitation) interactive video
applications, however transmitted, whether in the form of data, teletext or
packets. Subject to the following sentence and the specific exception stated in
the second grammatical paragraph in Section 1.4(b) above, [*******************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************************************] A Non-DTH Transponder, once used
primarily for Customer's DTH Service, shall cease to be deemed a Non-DTH
Transponder, but may again become a Non-DTH Transponder if its use reverts
primarily to non-DTH use.
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(d) Use by Others. In any circumstances in which Customer is
permitted above to allow the Service Transponders to be used by other Customer
Companies, or in circumstances in which Customer's DTH Service may carry
programming services provided to it by others, Customer shall remain ultimately
responsible to PanAmSat for all such use. In such circumstances, Customer's
responsibilities to PanAmSat with respect to Customer's use of Service
Transponders, Customer's transmissions to the Satellite, Customer's programming
and the responsibilities of Customer to PanAmSat for other activities hereunder
shall be read to include the use, transmissions, programming, and activities of
any such other entity. Customer shall also be responsible to PanAmSat for [*****
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*******************************************************************************]
(e) International PSN Restriction. In no event may the Service
Transponders (except to the extent that they are remarketed by PanAmSat, as
provided below) be used for switched public international telecommunications
services.
(f) Intent of Third Party Use. Customer acknowledges and
agrees that it is the parties' intent, in allowing the carriage of programming
services provided by others, to further Customer's ability to develop the DTH
market, but
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not to allow Customer to resell or otherwise make the Service Transponder(s)
available to others at a profit solely on the capacity itself, and that Customer
shall not, through the permission granted or through any other agreement or
arrangement, enter into any agreement to, or use the Customer Transponder(s) in
any way that would, materially conflict with this intent.
1.5 Transmission Plan for Transponders. Customer's transmissions to the
Satellite (which may be performed by one or more third party uplink providers,
as provided in Section 4.2 below) shall conform to digital transmission plans to
be submitted by Customer to PanAmSat and that shall be subject to PanAmSat's
prior written approval. The transmission plan shall include such information as
called for in the form of transmission plan that is attached hereto as Appendix
M and such other technical information as PanAmSat may require in its reasonable
engineering judgment to manage the operation of its satellites. Customer shall
be permitted to modify these transmission plans from time to time, subject to
PanAmSat's prior written approval. PanAmSat shall not unreasonably withhold its
approval of a transmission plan or modification to such a plan, which approval
shall be based solely upon the considerations identified in Section 4.1 below.
PanAmSat makes no representation, warranty, or covenant regarding the efficacy
of the use of any number of carriers or other alternative uses of capacity
provided under this Agreement. If not otherwise provided by PanAmSat pursuant to
separate agreement, Customer will provide PanAmSat, at no cost to PanAmSat, with
equipment necessary to decode its signals. It is understood that, in some
circumstances, PanAmSat may provide uplink services to Customer, in which event
Customer shall not be responsible to PanAmSat for the technical operation or
performance of such PanAmSat-provided uplinks under this or other sections of
this Agreement.
1.6 Marketing by PanAmSat of Customer's Capacity. At Customer's
request, PanAmSat shall market Service from Service Transponders for use by
third parties on an interim basis until Customer requires them for Customer's
DTH Service; provided that, after six months from the Service Date (the "Initial
Six Months") such marketing shall be limited to a maximum of [******] Service
Transponders. In such circumstances, PanAmSat shall use all reasonable efforts
to market services from the Service Transponders made available for this purpose
(which Customer would thereafter cease to employ) for the interim period to
other
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potential customers for video, data, or other uses, as market demand and
technical considerations may warrant, as reasonably determined by PanAmSat in
consultation with Customer, and subject to PanAmSat's reasonable discretion with
regard to the terms and conditions of service and selection of appropriate
customers, which shall be consistent with its general practices in this regard,
and Customer's consent rights set forth in clause (b) of this Section. In such
event:
(a) For the Initial Six Months, Customer's [******************
********************************************************************************
*****************************************************] Thereafter, subject to
Sections 1.7 and 1.8 below, the [*********] for any Service Transponders that
are or remain released for remarketing shall [*******************************
***********] In all cases, the applicable Service Fee shall continue to be
payable.
(b) PanAmSat shall actively market services from the Service
Transponders in good faith, provided that PanAmSat shall not be obligated to use
the Service Transponders ahead of any other capacity that PanAmSat may also have
available for comparable service. During the Initial Six Months, PanAmSat shall
market service from the Service Transponders made available under this Section
for occasional use; thereafter, unless otherwise agreed, marketing shall be for
full-time, fixed term uses. With the exception of the marketing of the Service
Transponders for occasional use during the Initial Six Months, all contracts
regarding possible use by third parties of Service Transponders, as permitted
under this Section 1.6, shall be promptly forwarded by PanAmSat to Customer for
specific written approval, rejection, or proposed modification by Customer, it
being understood that neither PanAmSat nor a third party customer shall be
required to accept Customer's proposed modifications, but also may not go
forward with an unmodified agreement for Service Transponders under this Section
1.6 that Customer has not approved. Customer shall also have the right to
approve or reject any particular customers for service from Service Transponders
that are made available under this Section. In addition, subject to the
considerations stated above, if Customer identifies to PanAmSat a potential
customer who desires to purchase service from PanAmSat that employs the Service
Transponders, PanAmSat shall seek, in good faith, promptly to enter into a
service agreement with said customer, provided that if PanAmSat was already in
negotiations with said potential customer
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for other PanAmSat capacity, PanAmSat shall not be required to discontinue such
negotiations; and
(c) PanAmSat shall credit against Customer's next monthly
"Service Fee" (as defined below) (which shall continue to be due and payable),
during this period, such amounts that are actually received from other customers
for service from the Service Transponders for the previous month (less costs
reasonably incurred by PanAmSat for which PanAmSat is not separately reimbursed
for providing any related services and equipment that may be associated with the
provision of such service, e.g., turnaround, compression, or other terrestrial
services or facilities ("Additional Facilities Costs") and costs (including
reasonable attorneys' fees) reasonably incurred by PanAmSat in marketing such
services to, or negotiating a service agreement with, third parties)
("Transaction Costs") up to the amount of the Service Fee paid by Customer for
the applicable period for the Service Transponders made available by Customer to
PanAmSat for remarketing under this Section 1.6. For purposes of marketing for
occasional use, the parties agree that PanAmSat's Transaction Costs shall be
deemed to equal [******] of the revenues actually received from such effort. In
addition, after deducting the Additional Facilities Costs, if any, and
Transaction Costs specified above, if the [************************************]
by PanAmSat for service from the Service Transponders [****] the [**************
**] to be [***] to PanAmSat by Customer for [*********************] (the [******
******]) in [******] to crediting the next month's Service Fee payment, PanAmSat
shall [*******] as an [**********************] of such [***********] and shall
[***] Customer [*********] of such [*****************]
1.7 Withdrawal from DTH Business. Customer shall use all reasonable
efforts to use the Service to develop a DTH Service. If despite such efforts,
Customer and each of the Customer Companies (which, for this purpose, includes
the Founding Partners and their Affiliates, whether or not the Founding Partners
continue to hold an equity interest in Customer) ceases to own, operate, or have
an investment in, or otherwise have an economic interest in a DTH Service
operating within the [******] Territory, in each case, with no plan to reenter
DTH Service market in the [******] Territory on any such basis, then the
following shall occur:
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(i) Customer shall so notify PanAmSat and shall cease using
the Service Transponders, which shall thereafter be available for marketing by
PanAmSat;
(ii) Subject to clause (v), below, Customer shall continue [*
***] PanAmSat [****************************************************************
****************************************] of [*******] per Service Transponder;
(iii) PanAmSat and the "PanAmSat Companies" (as defined in
Section 1.8) shall cease to have any obligations under Section 1.8 and Article
16 of this Agreement.
(iv) PanAmSat shall actively market services from the Service
Transponders in good faith subject to PanAmSat's reasonable discretion with
regard to the terms and conditions of service and selection of appropriate
customers, which shall be consistent with its general practices in this regard
provided that PanAmSat shall not be obligated to use the Service Transponders
ahead of any other capacity that PanAmSat may also have available for comparable
service. In addition, subject to the considerations stated above, if Customer
identifies to PanAmSat a potential customer who desires to purchase service from
PanAmSat that employs the Service Transponders, PanAmSat shall seek, in good
faith, promptly to enter into a service agreement with said customer, provided
that if PanAmSat was already in negotiations with said potential customer for
other PanAmSat capacity, PanAmSat shall not be required to discontinue such
negotiations; and
(v) PanAmSat shall credit against Customer's next monthly
"Service Fee" such amounts that are actually received from other customers for
service from the Service Transponders for the previous month less (A) [********]
per month per Service Transponder and (B) PanAmSat's Additional Facilities Costs
and Transaction Costs associated with the remarketing of the Service
Transponders up to the amount of the Service Fee paid by Customer for the
applicable period for the Service Transponders.
1.8 [**************]
(a) (i) PanAmSat. Subject to the exceptions stated in this
Section 1.8, PanAmSat agrees that, during the "Term" of this Agreement (as
defined
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below), neither it nor any "PanAmSat Company" (defined herein as an Affiliate of
PanAmSat) will:
(A) use or enter into any transponder
contract (service, lease, purchase, or other vehicle) that does [**********] the
[***] of any Ku-band Transponder on any satellite which (x) is owned, operated
or managed by PanAmSat or any PanAmSat Company, (y) is located in the [****
************] and (z) has Ku-band coverage over the [********] Territory (other
than by a [*******************]) for the purpose of delivering any DTH Service
in [**************************] and, in such contracts that provide Ku-band
coverage over [*******************] for [*************] specifying Customer as a
[**************************] entitled to [**********] such [**************];
(B) use or enter into any multiple
transponder contract for PAS-5 transponders (service, lease, purchase, or other
vehicle) that does [**********] the [***] of PAS-5 transponders with coverage
over [********] (other than by a [*****************] for the purpose of
delivering any [*************************************************************
*********] and, in such multiple PAS-5 Transponder contracts, if any, that
provide Ku-band coverage over [********] for other purposes, specifying Customer
as a [***********************] entitled to [********] such [***********
********************************************************************************
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******************************************]
(C) use or enter into any transponder
contract (service, purchase, or other vehicle) for the full-time, long term use
of the steerable Ku-band Transponders on PAS-5, if oriented for coverage over
[************] Territory, for use in the [*******] Territory without [*********
********************************************************************************
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*********************************
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********************************************************************************
********************************************************************************
********************************************************************************
************************************************************]; or
(D) [*****] its [********] for any satellite
located in the [****************************************************************
********************************************************************************
**************] unless the assignee agrees to be bound by the provisions of the
previous clauses (A), and, if applicable to PAS-5, (B) and (C).
The foregoing notwithstanding, neither PanAmSat nor any PanAmSat Company shall
be required to place [*************] on Ku-band Transponders that [*******] the
[*****************] of transmissions [******************] in the [********]
Territory (or, under clause B above, [*******]), as part of a
[**************************] that is [**************] for this purpose and that
is [*************] for other purposes (e.g., [********] to
[******************]), nor shall PanAmSat or any PanAmSat Company be required to
place [************] on the use of Ku-band Transponders whose
[*************************************] of [**********************] (or, under
clause B, [*********]) but that may have spillover coverage (in terms of
[***************] for DTH service) over a [**********] of the applicable area.
For the avoidance of doubt, none of the restrictions on PanAmSat or any PanAmSat
Company that are stated in this Section 1.8 shall apply to any satellite that is
[************************************]
(ii) Customer. Subject to the exceptions stated in
this Section 1.8, Customer agrees that, during the Term of this Agreement,
neither it nor any Customer Company will:
(A) own, invest in, or hold an economic
interest in a DTH Service [**************************************] that [******
*****************************] other than that provided by [********] pursuant
to this [*********] except as to the acquisition of transponder capacity for
the benefit of Customer's DTH service under circumstances in which the
restrictions of the immediately following clause (B) are waived and the
[************************************] are applied; or
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(B) use [*********************************]
with coverage over [*********************] other than that provided by
[********] pursuant to this [************] for the [*********] of
[********************************************]
(iii) General Exceptions. It is understood and agreed
that nothing herein shall prohibit: (A) PanAmSat or a PanAmSat Company or
Customer or a Customer Company from making an investment in [************
*******] or its DTH Service; (B) PanAmSat or a PanAmSat Company from making an
investment in Customer, a Customer Company, or in Customer's DTH Service; nor
(C) Customer or any Customer Company from making an investment in PanAmSat or a
PanAmSat Company.
(b) Customer Exceptions. Subject to Section 1.8(g) below
(Survival), this Section 1.8 shall cease to apply to Customer or any Customer
Company in the following circumstances: (i) Customer is using [***] of the
[******] provided hereunder for the [***************] DTH Service, (ii) Customer
requests in writing, for PanAmSat to [****************] Ku-band capacity for its
DTH Service, which request shall make express reference to Customer's intent to
invoke its rights under this clause, and (iii) PanAmSat is [*******] to make
such [******************] available, at agreed upon [**********] or, if
applicable, [********] as [*******] under Section 16.1(a)(ii) that Customer has
accepted, within [**********] of such written request and agreement on, or
acceptance of, [*********] and (iv) within [*************] following the date
that PanAmSat notifies Customer that PanAmSat is [*******] to meet such
[**********] request within said period, Customer acquires or enters into a
binding agreement to acquire such [***************************] PanAmSat shall
keep Customer reasonably apprised of its efforts in response to a written
request under this clause and shall notify Customer at any such time that
PanAmSat reasonably determines that it will not meet such request within the
[************] period provided.
(c) [****************] In addition to the above exceptions,
subject to Customer's obligations under Section 3.2(c) below, Customer shall be
permitted to [***] its Transponder capacity on [**************] provided that
its DTH Service is [*********************] capacity provided by PanAmSat as soon
as reasonably practical.
(d) [*****************************] At Customer's option, the
provisions of this Section 1.8 shall [************] to a [*****************] on
and after
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such date that it [*******] to have or be Affiliated with an entity that has any
direct or indirect ownership, investment or other economic interest in the
Customer or its DTH Service; provided as follows: (i) in [**********] shall more
than [***] of the [*********************] or Affiliates of more than [***] of
them, directly or indirectly, own, invest in, or otherwise hold an economic
interest in the [*****] DTH Service operating within [********************]
(other than the Customer's DTH Service) (ii) Customer shall, and shall
contractually require the [*********************] to, notify PanAmSat at such
time that a [*****************] (or any of its (their) Affiliates) enters or
takes any material step toward entering (e.g., securing [********************]
or [*********************] for a DTH Service) the business of providing DTH
Service in [*******************] or acquires, direct or indirectly, an
ownership, investment or other economic interest in another DTH Service
operating or which has taken or takes material steps toward operating within
[**********************] (any such event being referred to herein as a
[***********************************] [(iii) intentionally deleted;] (iv) at
PanAmSat's option on notice to Customer, and without regard to any other
[****************************] otherwise stated in this Agreement, [**********
********************************************************] and (v) within thirty
(30) days of PanAmSat's notice to Customer under clause (iv) above, Customer
shall [*************************************************************************
*****************************************] under this Agreement, [**************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*********************************************]
(e) Intentionally Deleted.
(f) Notices. Each party shall promptly notify the other of an
event that gives rise to a right to [*********] the [*********] of this Section
1.8 in relevant part. Within [********************] (or, in the case of clause
1.8(b)(i), [*************] of the later of: (i) the date that such notice is
received, or (ii) the [**************] for PAS-5, the party receiving such
notice must [********] the right granted or it shall be [**************] as to
the event giving rise thereto (but not as to any future independent
circumstances that may give rise to a separate right).
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(g) Survival. The [*************] provisions of this Section
1.8 shall not relieve Customer, the Customer Companies, and, even if no longer a
Customer Company, the Founding Partners from the obligations stated in Sections
1.8(a)(ii)(A) and 1.8(d)(ii), (iv) and (v).
(h) [********************] of DTH Service. For purposes of
this Section 1.8 and Section 3.2(c) below, [***********************] do
[*************] DTH Service. In addition, for purposes of this Section 1.8 and
Section 3.2(c), the definition of "DTH Service" is [********] to
[********************] with associated [*****] and [****************] that is
intended for [******************] via satellite by [********************
***********] in the [********]
(i) Successors in Interests. For the avoidance of doubt and
not for limitation, the provisions of this Section 1.8 shall be binding upon any
entity that acquires all or substantially all of the assets of an entity that is
otherwise subject to the provisions to the same extent that the provisions would
be applicable to the entity being acquired.
(j) Individual Conduct. If any individual(s) who Controls an
entity that is subject to this Section 1.8 or any entity that is directly or
indirectly Controlled by such individual(s) takes an action, including (without
limitation) material steps toward doing so, of the kind described in Section
1.8(d)(ii) above, that would be prohibited under this Section, if said
individual were an entity, then the party that is not (if such individual(s)
were an entity) Affiliated with such individual may [**********] the
[***********] of this Section 1.8 on notice to the other party. In addition, the
conduct of such an individual, if he or she, if an entity, would be that of an
Affiliate of a Founding Partner, shall have the same additional consequences
under Sections 1.8(d) and Article 16 of this Agreement as if that Founding
Partner were a Founding Partner in Competition.
ARTICLE 2. TERM, SERVICE TERM, DEGRADED SERVICE
2.1 Term, Service Term. The term of this Agreement (the "Term") shall
commence upon the first date above written and, unless previously terminated in
accordance with the provisions of this Agreement, shall, subject to Section
16.1(f), remain effective until the end of the "Service Term," as defined below.
The "Service Term" is acknowledged to have commenced on October 12, 1997 (the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
15
"Service Date"). PanAmSat hereby certifies to Customer that all of the Service
Transponders met the "Service Specifications" as set forth in Appendix C as of
that date. The "Minimum Complement" of Service Transponders on PAS-5 is [****
***] Unless sooner terminated under Article 7 below, the Service Term shall end
when PAS-5 is taken out of commercial service (or relocated in the case of
Section 7.4(c)) in accordance with Section 7.4 below. For the avoidance of
doubt, while the Satellite is anticipated to have a lifetime of twenty-four (24)
to twenty-five (25) years, the anticipated life of the Satellite after launch
shall not be considered for purposes of determining whether the Service
Specifications are being met.
Customer acknowledges and agrees that PAS-5 has been designed
by its manufacturer for a planned life of fifteen (15) years, but because of the
use of a Proton launch, the launch of the Satellite is now predicted to allow
enough fuel for the Satellite to be maintained between twenty-four (24) years
and twenty-five (25) years. Customer further acknowledges and agrees that such
extended life beyond the approximate fifteen (15) years that would otherwise be
anticipated are due to the particular circumstances associated with the launch
of PAS-5 and may not occur and will not be required to be repeated in the case
of [***************************************************************] from which
capacity may be taken or ordered pursuant to this Agreement.
2.2 Intentionally Deleted.
2.3 Intentionally Deleted.
2.4 Degraded Service. Either before or after the Service Date, if a
Service Transponder, while operational, does not meet the Service
Specifications, Customer shall have the right, within ten (10) days of being
notified of this condition, provisionally to waive the Service Specifications to
the extent that they are not met.
If Customer gives such a provisional waiver, Customer shall
have an additional fifty (50) days (for a total of sixty from being notified of
the condition) in which to determine whether to accept the degraded capacity and
grant a permanent waiver of the Service Specifications to reflect the affected
Transponder(s)' current operating level, or not. The applicable termination
provisions of Section 7.3 shall also be stayed during any period in which
Customer is considering electing a permanent waiver.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
16
If Customer gives a provisional waiver, it shall take and pay
for the affected degraded capacity, as if provided in accordance with the
Service Specifications until the conclusion of the sixty day period specified
above. On or before the end of this sixty-day period, either Customer shall
grant a permanent waiver of the Service Specifications or the termination
provisions of this Agreement, as to the capacity that does not meet the Service
Specifications shall, at that time, apply.
If a permanent waiver is given, it shall be deemed to apply
retroactively to the time of such failure to meet the Service Specifications (so
that, for example, the Service Date shall be deemed to have occurred on the same
day as the Service Date of the other Service Transponders on the Satellite that
meet their Service Specifications). In such event the Service Specifications for
the affected Service Transponder(s) shall be reduced to reflect the current
operating level of the affected Service Transponder(s); provided that PanAmSat
shall continue, if there are further steps that may practically be taken, to use
reasonable efforts to restore the affected Transponder to meet the Service
Specifications. For the avoidance of doubt, a waiver given under Section 2.4
shall not, unless otherwise agreed by Customer, be deemed to apply to any
further reduction in performance from the operating level of the affected
Service Transponders at the time that the waiver was given.
2.5 Pre-Service Testing. PanAmSat shall use all reasonable efforts to
coordinate with its satellite manufacturer (who conducts the pre-Service
in-orbit check out of PAS-5) to allow Customer, in consultation with PanAmSat,
to test Customer's transmit and receive equipment to be used with PAS-5 on a
noncommercial basis during the post-launch, pre-Service period; provided that
such tests do not interfere with the in-orbit testing, maneuvers, or other
related activities that are being conducted. PanAmSat shall cooperate with
Customer in carrying out such testing. Customer shall comply with all of the
provisions of this Agreement regarding such transmissions and any other
additional restrictions of which it may be notified vis-a-vis the requirement
not to interfere with the in-orbit tests or related activities relative to
PAS-5. Customer shall be responsible for any damage caused by its failure to
abide by any of these conditions.
17
ARTICLE 3. CUSTOMER PAYMENTS.
3.1 Monthly Service Fees, Deposit. For each month of the Service Term
beginning on the Service Date, Customer agrees to pay a monthly service fee (the
"Monthly Service Fee") that, subject to [***********************************]
shall be determined in accordance with Section 3.2 below. Not later than three
(3) months after the end of each [************] (as defined in Section 3.2),
Customer agrees to pay PanAmSat a [**************] payment, as and if determined
to be required under Section 3.2, so that Customer's [************************
***************************] obligation to PanAmSat for the [**************] is
satisfied. Customer shall make each and all payments of the Monthly Service Fee,
in advance, no later than the first business day of each month of the Service
Term. Payments due for Service under this Agreement are more generally referred
to as "Service Fee(s)."
PanAmSat acknowledges its receipt of a "Deposit" of [************
**************************************] (the "Deposit"). This Deposit has been
applied as an offset against the first and second Monthly Service Fees.
As set forth in Section 3.2(b), Monthly Service Fee payments, above
the [*****************] per Transponder, shall be calculated [******************
***********************************] This does not relieve Customer of its
obligation to make payment at the beginning of each month of the Service Term,
but does allow payment [*******************************************************
*****************************] By way of example only, [**********************
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3.2 [***********************] Service Fee.
(a) [*******] Obligation. For each [**************] the total
of Customer's "Monthly Service Fees" and [***************] payment to PanAmSat
(each as determined below) for each Service Transponder (other than any [*******
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
18
************] shall yield [*******] Service Fee per Transponder [********] to
PanAmSat that shall be determined by the following table:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
19
[***********************
********************** [******************************
************************] *******************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************************]
[******************************************]
As used in this Agreement, [***********************] means each [***] month
period commencing on the Service Date and each [************] thereafter and
[*******************************************************************************
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
20
[*******************************************************************************
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
21
[*******************************************************************************
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(b) Monthly Obligation. Customer's Monthly Service Fee for
each Sevice Transponder [*****************] shall be determined based upon the
[***********************] applicable Monthly Service Fee is due, in accordance
with the following table:
[***********************
********************** [******************************
************************] *******************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************************]
[******************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
22
After the first Monthly Service Fee payment for each [*************] subsequent
Monthly Service Fee payments shall be [***************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
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*******************************************************************************]
[***********************
********************** [******************************
************************] *******************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[********************] [********************************
********************]
[*******************************************************************************
*********************************************************************]
[********************************]
[******************************************]
(c) Use of [**************************************************
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******************************************************************] then, except
as provided in this Section 3.2(c), from and after the Service Date under this
Agreement, the [***************************************************************
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********************************************************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
23
********************************************************************************
*************************************************************] without implying
any additional rights to use such [**************************] and without
prejudice to any remedy to seek injunctive relief to prevent such use as
permitted under Section 9.4 of this Agreement.
If Customer [****************************************
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The foregoing notwithstanding, from and [************
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*******************************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
24
[*******************************************************************************
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****************************] The previous sentence notwithstanding, [*********
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*****************************************************]
(d) Yearly True Up. Within ninety (90) days of the end of each
Fiscal Year, Customer shall provide PanAmSat with a "Year End Statement" of
actual [*****] for the preceding Fiscal Year which statement shall be certified
by the independent auditors of Customer, which shall be one of the "Big Six"
international accounting firms, in accordance with United States generally
accepted auditing principles. The Statement shall include a financial statement
that shows, without limitation, [******************************] and an itemized
listing of all deductions made in calculating [******] and the MSF/T that should
have been paid based upon the MSF/T calculations set forth above. Customer shall
accompany its Year End Statement with a payment to
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
25
PanAmSat of any amount by which the total of the Monthly Service Fees for the
preceding Fiscal Year fell below the actual ASF/T for all of the Service
Transponders that was required. In the event that the Monthly Service Fees made
for a Fiscal Year exceeded the actual ASF/T due for all of the Service
Transponders for any Fiscal Year, the overage shall apply as a credit against
Monthly Service Fees due for the following Fiscal Year, until exhausted. To the
extent that the Monthly Service Fee paid for any particular month was less than
the Year End Statement shows should have been paid (based upon applicable MSF/T
calculations), said failure to pay the amount required shall be subject to
interest, from and after the time that it should have been paid until it is
paid, at the rate specified in Section 3.4.
(e) Early Termination. In the event that this Agreement is
terminated in whole or in part as to any individual Service Transponder(s) or
certain Service Transponders [*************************] for some or all of the
[***********] the above [*************] shall be made pro rata based on the
percentage of the [************] in which the Service Transponder(s) were made
available to Customer under this Agreement. [*****************************
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*******************************************************************************]
(f) [**************************************] Customer shall,
consistent with good business practice, use all reasonable efforts to use the
Service provided hereunder to develop and grow a DTH business [*************
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
26
********************************************************************************
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*****************************************]
(g) Books of Account, Audit Rights.
Customer shall keep, or cause to be kept, accurate and
complete records and books of account of all transactions of the Customer, for a
minimum of five (5) years, or further as to any amounts in dispute. The
Customer's books and records shall be kept in accordance with generally accepted
accounting principles applicable thereto, shall be maintained at the principal
place of business of the Customer and shall be available for inspection and
examination, for a proper purpose and at reasonable times during usual business
hours for a reasonable examination of the books and records of Customer by an
independent accountant, designated by PanAmSat and reasonably acceptable to
Customer, which shall report to PanAmSat its findings as to Customer's
compliance with its payment obligations; provided that: (a) the fees of such
accountant and all other costs association with such examination shall be borne
by PanAmSat, except as provided below; (b) such examination shall take place
during normal business hours and in a manner that is not disruptive to the
business of Customer; (c) such examination is used solely for determining
Customer's compliance with this Agreement; and (d) such information shall be
kept confidential and shall be used by PanAmSat solely for the purpose of
confirming and enforcing Customer's compliance with its payment obligations to
PanAmSat under this Agreement, subject to applicable laws and stock exchange
regulations. In the event that the audit shows one or more [************] by
more than [**********************] shall pay [*******] reasonable audit costs.
3.3 Manner Of Payment. All payments by Customer shall be made in U.S.
dollars; shall be deemed to be made only upon receipt by PanAmSat of collected
funds; and shall be made by bank wire transfer to such bank account as PanAmSat
may designate by notice to Customer, or by cashier's or certified check, from a
U.S. bank, delivered to PanAmSat at its principal place of business, as
designated in Section 14.5(b).
3.4 Late Payment. Any payment due from Customer to PanAmSat that is not
received by PanAmSat on the date that it is due shall be subject to a
delinquency charge (liquidated damages) at the rate of [*********************
*****************] on such overdue amount from the due date until it is actually
received by
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
27
PanAmSat. Customer acknowledges that such delinquency charge is reasonable under
all the circumstances existing as of this date.
3.5 Taxes. Customer shall be responsible for, and shall indemnify
PanAmSat against, all Taxes that may be asserted as a result of the Service
provided to Customer and/or Customer's use of the Service, except for U.S.
income, property, or employment taxes imposed on PanAmSat; provided, that, to
the extent that Taxes may be imposed with respect to the Satellite itself,
Customer shall be responsible for a pro rata share (to be reasonably determined
by PanAmSat) in proportion to the capacity of the Satellite used by Customer,
but in no event greater than a fraction equal to the number of Service
Transponders divided by the number of Transponders on the Satellite. For
purposes of this Agreement, "Taxes" shall mean all foreign, federal, state,
provincial, and local income, franchise, sales, use, receipts, value added,
transfer, profits, excise, stamp, withholding and property taxes, duties or
assessments and governmental charges of any kind whatsoever (including interest,
penalties and additions with respect thereto). [*******************************
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*****************************************]
ARTICLE 4. CUSTOMER'S OBLIGATIONS IN USING THE SERVICE TRANSPONDERS.
4.1 Non-interference and Use Restrictions. Customer's transmissions to
and from the Satellite and its use of the Service shall comply with all
applicable governmental laws, rules and regulations, and with the operational
requirements (the "Operational Requirements") set forth in Appendix D, as the
same may be modified from time to time by PanAmSat, in its reasonable
discretion, but only for good technical cause(s). Customer will follow
established practices and procedures for frequency coordination and will not use
the Service Transponders, or any portion thereof, in a manner which would or
could reasonably be expected to, under standard engineering practice, interfere
with the use of any other Transponder, the Satellite, or any other satellite or
transponder on such satellite, or cause physical harm to the Service
Transponders, any other Transponder, the Satellite, or any other in-orbit
satellite or transponder on such satellite. Provided that Customer's
transmissions conform with the transmission plans approved by PanAmSat under
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
28
Section 1.5 above, Customer complies with the Operational Requirements, as the
same may be modified as provided above, and Customer immediately ceases any
transmission upon being notified by PanAmSat of any violation of this Section
4.1 (even if such transmission is in conformity with the Operational
Requirements), Customer shall not be deemed to be in breach of its obligations
under the preceding sentence.
4.2 No Terrestrial Facilities. Subject to the exception stated in
Section 1.5 above with respect to PanAmSat-provided uplinks, if any, Customer
shall be responsible for the provision, installation, operation and maintenance
of all earth station facilities and equipment ("Customer-Provided Facilities"),
for transmitting signals to, or receiving signals from, the Satellite in
accordance with the requirements set forth in this Agreement. Customer shall
also be responsible for acquiring all authorizations necessary for installation
and operation of Customer-Provided Facilities. Customer shall be permitted to
contract with third parties to transmit its signals to, or receive its signals
from the Satellite; provided, that, Customer requires its contractors to agree
to comply with all of the requirements set forth in this Agreement regarding
transmissions to, or reception from, the Satellite. If Customer retains third
parties (other than PanAmSat) as permitted by the previous sentence, these third
parties' facilities shall be deemed to be Customer-Provided Facilities and the
acts and omissions of these third parties in connection with the transmission or
reception of Customer's signals shall be deemed to be the acts and omissions of
such third parties and of Customer. Any provision by PanAmSat (or by an
affiliated company) to Customer of earth station or other terrestrial facilities
or services shall be the subject of a separate agreement.
[*******************************************************************
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**************************************]
4.3 Customer's Transmitting Stations. Customer will configure, equip
and operate its transmit facilities so that the interface of these facilities,
in space, with the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
29
Satellite shall conform to the characteristics and technical parameters of the
Satellite. Customer will follow PanAmSat's procedures for initiating or
terminating any transmission to the Satellite. Customer will operate all
transmit facilities in a manner that allows for cessation of, and will cease,
transmission immediately upon receiving notice from PanAmSat under Section
15.5(a) ("Telephone Notices"). Customer will furnish information on a continuing
basis as reasonably required by PanAmSat to prepare for, initiate, provide,
maintain and immediately discontinue the use of the Service Transponders upon
notice by PanAmSat.
PanAmSat shall have the right, but not the obligation, subject to such
reasonable confidentiality and use restrictions as Customer may impose, to
inspect any Customer-Provided Facilities together with associated facilities and
equipment used by Customer, or by a third party under the authority of Customer,
to transmit to the Service Transponders. PanAmSat will use all reasonable
efforts to schedule inspections to minimize the disruption of the operation of
the facilities, and Customer shall make the facilities available for inspection
at all reasonable times. Customer shall, upon PanAmSat's request, provide
measured proof that any transmit facility meets or exceeds the sidelobe envelope
described in Appendix D.
4.4 Consistent Application of Satellite Operating Procedures. PanAmSat
shall have similar (but not necessarily identical) restrictions not to interfere
with or cause physical harm to the Satellite, its Transponders, and other
satellites and their transponders, as contained in this Agreement with all other
customers, including any of its Affiliates, having a right to uplink to the
Satellite and shall enforce these restrictions (and, to the extent it may use
the Satellite for its own services, follow these restrictions itself) in a
consistent and nondiscriminatory manner vis-a-vis Customer and the other
customers with a right to uplink to the Satellite. Allowing for the fact
(understood and accepted by Customer) that technical variations in the kinds of
transmissions that different customers may employ, different performance
characteristics of different Transponders, differences in the use of adjacent
frequencies or the same frequencies on other satellites, other technical
factors, and the use of different uplink providers and facilities may require
the application of different restrictions to achieve the same non-interference
and satellite protection goals, PanAmSat shall not require Customer to follow
Operational Requirements or transmission procedures that are more stringent than
those imposed upon other customers on the same Satellite in comparable technical
circumstances.
30
ARTICLE 5. TRANSPONDER FAILURE, PROTECTION.
5.1 Intentionally Deleted.
5.2 Intentionally Deleted.
5.3 Transponder Failure. If, after the Service Date, a Service
Transponder fails to meet the Service Specifications for: (a) any period of
[***************************************] or (b) a [********************] of
[********************] during any [******************************] or (c) any
[****************] following a [*********************] under circumstances that
make it [**********************] that a [***********] described in clauses (a)
or (b) will occur, such Transponder shall be deemed to have failed on a
"Confirmed Basis." Any such failure must be confirmed by PanAmSat, which it
shall take steps to do as expeditiously as possible. If confirmed, the failure
shall be measured as commencing from notice from Customer to PanAmSat of such
failure (provided that the affected Service Transponder is, in fact, not meeting
the Service Specifications). Any such failure shall be deemed to have ended upon
notice from PanAmSat to Customer that the affected Service Transponder is
capable of meeting the Service Specifications (provided that the affected
Service Transponder is, in fact, meeting the Service Specifications); provided,
further, that if PanAmSat enters into an agreement to provide Ku-band capacity
from the Satellite on which a Service Transponder is located and such agreement
provides that, for purposes of employing said "Spare Equipment" on the
Satellite, failure on a Confirmed Basis shall be deemed to have occurred in less
than the applicable time periods specified above, PanAmSat shall determine
whether a failure on a Confirmed Basis has occurred for Service Transponder on
the same Satellite under this Agreement using the time periods specified in such
other agreement.
In the event a Service Transponder fails on a Confirmed Basis,
PanAmSat shall, as soon as possible and to the extent technically feasible,
employ certain redundant equipment units, as described in Appendix B ("Spare
Equipment") on a first-needed, first-served basis as among Customer and other
Transponder owners, lessees, and users, including without limitation, PanAmSat
and its predecessors in interest ("Protected Parties"), as a substitute for a
Service Transponder equipment unit which has failed.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
31
Customer acknowledges and agrees that the Spare redundancy
plan of the Satellite may require PanAmSat to reassign certain traveling wave
tube amplifiers ("TWTAs") among Transponders to make use of a TWTA. In
circumstances in which a spare TWTA is required to be employed for any customer
and to do so requires a change in the TWTA assigned to Customer, Customer shall,
on notice from PanAmSat, cease transmitting to the applicable Service
Transponder(s) to allow the TWTA that is assigned to its Transponder(s) to be
reassigned and a different unit (that meets the Service Specifications) to be
put in its place. PanAmSat shall use all reasonable efforts to keep to a minimum
the time during which Customer is required to cease transmitting under this
paragraph, in accordance with good engineering practices, to make the shift in
the assignments.
In the event that [*************] Transponders
[*****************] to meet their respective [***********] or
[*****************************] and are entitled to [**********] under any
applicable agreement with PanAmSat, then the Protected Party who first executed
a definitive agreement as to the affected Satellite with PanAmSat or its
predecessors in interest shall, to the extent [***********************] have
[***********] as to use of the [******************] provided that, if [********]
from a Transponder is provided to more than [***] Protected Party (for example,
if there are [***] customers each taking service from [*********] of a
Transponder), PanAmSat's decision may be made in accordance with the order that
the [****************] Protected Party(ies) using the Transponder(s)
[******************] with PanAmSat or its predecessors in interest. As used in
this Section 5.3, the term [******************] shall be deemed to mean [*****
******************************] All determinations as to when
[***********************************] shall have occurred, for purposes of
determining whether the failures are [*************] shall be made by
[**************************************************] For purposes of this
Section 5.3, the date of Customer's definitive agreement with PanAmSat shall be
deemed to be February 29, 1996. PanAmSat hereby confirms that, as of February
29, 1996, PanAmSat had not entered into any other agreements for PAS-5
transponder capacity other than with Televisa (for the same Service
Transponders), which has given its consent to PanAmSat's commitment of Service
from said Service Transponders to Customer.
5.4 Reduction in Number of Transponders as Overall Power on the PAS-5
Satellite is Decreased. Customer acknowledges that it has been advised by
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
32
PanAmSat that as the PAS-5 Satellite increases in age, because of an overall
power constraint on the Satellite, it may be necessary to cease operating (or
interrupt operation of) one or more Transponders (not anticipated
[*************************************************************************]), so
that the remaining Transponders continue to meet their applicable performance or
service specifications. Provided that it is consistent with protecting the
overall health and performance of the Satellite, as between the Service
Transponders and other Transponders on the Satellite, PanAmSat shall deactivate
Transponders that are necessary to address this power constraint in reverse
order of their right to protection under Section 5.3 above. The deactivation of
a Service Transponder under this Section 5.4 shall count toward determining
whether service on the applicable Transponder has failed on a Confirmed Basis.
5.5 Customer Cooperation. If a Service Transponder fails to meet the
Service Specifications, Customer shall use all reasonable efforts to cooperate
and aid PanAmSat in curing such failure; provided that all reasonable efforts
can be done at no cost to Customer. These obligations of Customer shall include,
but not be limited to, the following:
(a) At the request of PanAmSat, if there is a problem that can be
compensated for by increasing the power and/or changing other parameters of its
transmission to the Satellite, without affecting its Customer's use of the
Service, Customer shall do so to the extent it can with existing equipment; and
(b) Permitting PanAmSat, at PanAmSat's option, and at PanAmSat's
cost and expense, to upgrade the Customer-Provided Facilities.
5.6 Application to Individual Service Transponders. All determinations
of failures on a Confirmed Basis and protection rights to be made under this
Article 5 shall be made on an individual Service Transponder by Service
Transponder basis.
ARTICLE 6. PREEMPTIVE RIGHTS.
6.1 (a) Preemptive Rights In Abnormal Circumstances. Customer
recognizes that it may be necessary, in unusual or abnormal technical situations
or other unforeseen technical conditions, for PanAmSat deliberately to preempt
or interrupt Service to Customer from, and Customer's use of, one or more of the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
33
Service Transponders, solely in order to protect the overall health and
performance of the Satellite. Such decisions shall be made by PanAmSat in its
sole discretion, exercised in good faith. To the extent technically feasible,
PanAmSat shall give Customer at least 24 hours' notice of such preemption or
interruption and will use all reasonable efforts to schedule and conduct its
activities during periods of such preemption or interruption so as to minimize
the disruption of the services on the Satellite. Customer shall immediately
cease transmissions to the Service is at such time as its use of the Service
Transponder(s) preempted or interrupted pursuant to this Section. To the extent
that such preemption results in a loss to Customer of its use of a Service
Transponder sufficient to constitute a failure on a Confirmed Basis, Customer
shall have all the rights and remedies regarding termination set forth in
Articles 7.
(b) Testing in the Event of Failure. If the Service is not
meeting Service Specifications, but Customer elects to continue to use (and pay
for) the Service, as degraded, PanAmSat may, with Customer's reasonable consent
as to the time such action will be taken, interrupt Customer's use as necessary
to perform testing or take any other action that may be appropriate to attempt
to restore the affected Transponder(s) to the Service Specifications. In such
event, PanAmSat shall coordinate activities with affected customer(s) and shall
use all reasonable efforts to minimize the overall disruption of use to the
affected customer(s). If Customer refuses to provide the consent referred to in
the first sentence of Section 6.1(b) when such consent is requested, the
availability of remedies for failure to meet Service Specifications, including
the use of Spare Equipment and termination for failure to meet Service
Specifications shall be commensurately delayed.
ARTICLE 7. TERMINATION RIGHTS.
7.1 Intentionally Deleted.
7.2 Intentionally Deleted.
7.3 Termination For Failure After the Service Date. Subject to Section
2.4, on a Transponder by Transponder basis, this Agreement shall automatically
terminate if, after the Service Date, a Service Transponder fails on a Confirmed
Basis, unless, within thirty days of such failure, PanAmSat restores the
Transponder
34
to its Service Specifications using, if required, any available Spare Equipment.
In the event one or more of the Service Transponders fails on a Confirmed Basis
and PanAmSat does not restore or replace the Transponder so that the Service
Specifications are met, but one or more of Service Transponder(s) still meet the
Service Specifications, this Agreement shall continue as to the remaining
Service Transponder(s), so long as the Minimum Complement of Transponders (or,
on and after the date that is [****************] after the Service Date, such
lesser number of Service Transponders as Customer was actually using for the
provision of DTH Service to the Territory immediately prior to such failure,
which for purposes of this Section 7.3 would then be deemed to be the Minimum
Complement) continues to meet their applicable Service Specifications. If the
applicable Minimum Complement cannot be provided, Customer shall be permitted to
terminate this Agreement as to the remaining Transponders on the Satellite. Said
termination right shall be exercised, if at all, no later than six months after
the occurrence of such event. Termination shall be effective immediately on
notice to PanAmSat; provided that, at Customer's option, if within said
six-month period, Customer enters into a binding agreement to take transponder
capacity for the provision of its DTH Service from PanAmSat or another provider,
Customer may, in its notice of termination, make its termination effective upon
the date that such other capacity is available to Customer; provided that,
Customer shall have first sought such capacity from PanAmSat, but PanAmSat was
unable to provide the requested capacity within a comparable time period. In
such event, Customer shall notify PanAmSat of the projected date of such
availability and of any change thereto. If Customer fails to exercise the
termination right for the loss of the Minimum Complement within the period
specified, this Agreement shall continue, with the number of Service
Transponders that continue to meet their applicable Service Specifications, [***
********************************************************************************
********************************************************************************
******************************************************]
7.4 Satellite [**************] PanAmSat may determine to take the
Satellite [*****************] or, in the case of clause (c), relocate it to
other use if: (a) in PanAmSat's [************************] the remaining [****]
on board the Satellite is [**************************] maintain
[***************************** ***************************************] allowing
sufficient [*********************] the Satellite; (b) the Satellite [**********
**********] to meet their applicable performance or service specifications of
[*****************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
35
or more C-band Transponders or Ku-Band Transponders comprising
[********************************************]; with each high-powered Ku-band
Transponder (110 xxxxx) equaling [*********************] and each low-powered
Ku-band Transponder (60 xxxxx) equaling [**************] or (c) if Customer has
agreed to acquire capacity on a Successor Satellite, at such time that said
Successor Satellite is ready to be placed into commercial service. In such
event, PanAmSat shall promptly notify Customer of such determination and of the
date the Satellite will be taken out of service. The foregoing notwithstanding,
in the case of clause (b), if: (i) Customer agrees to enter into a [******]
Service Agreement for "Mexico Ku-band Transponders" [**************************]
as defined in and determined in accordance with Article 16 of this Agreement,
(ii) [**************************] Service Fees required to be paid under this
Agreement, Customer [**********************************************************
***************************************] of the Satellite after the occurrence
of the [***********] otherwise giving rise to PanAmSat's rights under clause
(b), and (iii) permitting [**********************************] PanAmSat's
[***************************************] for the Satellite (other than as to
the Service Transponders that would still be [**********************************
*********************] PanAmSat will not take [******************************]
pursuant to this clause (b) until the [****************************************
*********************************] On the date that the Satellite is
[****************************] this Agreement shall [*************************]
7.5 Termination By PanAmSat For Cause. PanAmSat may terminate this
Agreement if Customer fails: (a) to make payment of any amount due and such
amount remains unpaid within ten (10) business days after receiving from
PanAmSat a notice of such nonpayment (but only if the payment is at least twenty
(20) business days past due at the time of termination), or (b) to cease any
activity in violation of Section 4.1 or 6.1 upon receiving telephone or
facsimile notice from PanAmSat (provided that PanAmSat shall not be entitled to
terminate the Agreement under this clause (b) if all of the following
requirements are met: (i) Customer is (and remains) in compliance with Section
15.5(a), and the operator on duty mistakenly did not implement PanAmSat's
initial notice; (ii) the mistake was rectified as soon as it became apparent to
Customer; (iii) appropriate steps are taken to prevent a future recurrence of
the mistake and the problem is not recurring; and (iv) no damage occurred as a
result of the mistake or Customer immediately reimburses and indemnifies
PanAmSat for all such damage, or (c) to cease any other activity in violation of
Customer's material obligations under this
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
36
Agreement other than any part of Section 1.8 of this Agreement (exclusive of the
payment obligations set forth under clauses (iv) and (v) of Section 1.8(d) or
Section 3.2(c), the failure of which to meet shall be subject to PanAmSat's
termination and related rights under clause (a) of this Section 7.5) within
thirty (30) days after receiving from PanAmSat a notice of such violation.
In the event of a termination under Section [*******] PanAmSat
may declare immediately due and payable the [*******] for all of the Service
Transponders based on the then predicted life of the Satellite (or, if the
termination right specified in [************] is exercised, through the date
that is [***************************************] after the Service Date)
[*********] for [****************************************************] from the
date paid to the date otherwise due in the absence of termination, and apply any
remaining unapplied portion of the Deposit against the termination liability. In
the event of a termination under Section [************] Customer shall be
responsible for payments of the remaining [****] for all of the Service
Transponders that would be otherwise due and as they would otherwise become due
on and after the date of such termination; provided that if Customer fails to
make payment of any such amount due and such amount remains unpaid within ten
(10) business days after receiving from PanAmSat a notice of such nonpayment
(but only if payment is at least twenty (20) business days due at the time of
termination), then PanAmSat may declare immediately due and payable the
remaining Service Fees [******************************************************
*****************] as provided above, and apply any remaining unapplied portion
of the Deposit against the termination liability. For purposes of this
paragraph, [*****] shall be deemed to equal the greater of: [******************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************]
The foregoing notwithstanding, if the termination right under
Section [***] has been exercised, Customer's termination liability under this
Section 7.5 shall be limited to the amount calculated as due above through the
date that is fifteen (15) years, seven (7) months after the Service Date.
In the event of such termination, in addition to all of PanAmSat's
other remedies at law or in equity, PanAmSat shall be entitled to [***] the
Service
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
37
Transponders or to [***********************] on such Transponders to [*********]
PanAmSat [*********] and Customer shall [*************] to any
[****************] with respect to such [***] or any [********] of amounts paid
to PanAmSat; provided, as follows: In the event that Customer has paid (and, if
applicable, continues timely to pay to) PanAmSat all amounts due hereunder
including, without limitation, pursuant to the preceding paragraphs of this
Section 7.5 (the "Termination Payment(s)"), PanAmSat shall use all [**********
***********] to [********] the Service Transponders and in the event PanAmSat
subsequently reaches an agreement to provide service to a [*****************] a
Service Transponder during the period that Service from said Service Transponder
would have otherwise been available to Customer hereunder, PanAmSat shall remit
to Customer as a [********] of the Termination Payment(s) any [**************]
it receives from [*********************] with respect to such Service
Transponder during such period, up to the Termination Payment(s) paid by
Customer for such Service Transponder over and above all Service Fees that were
paid or due prior to the date that this Agreement was terminated, less (i) any
amounts owed by Customer to PanAmSat under this Agreement; (ii) any
[**********************] (including [****************************************]
by PanAmSat in [********************] such amounts from Customer; (iii) any
other [*************************] by PanAmSat as a result of Customer's breach
of its obligations hereunder; (iv) any [*********************] (including
[******************************************] by PanAmSat in [************] such
Service Transponder to, or [************] a [********************] with,
[*************] and (v) any [**************************] by PanAmSat in
[*****************************] and equipment for which PanAmSat is not
[************************] that may be associated with the provision of such
service in addition to those agreed to be provided under this Agreement. Nothing
herein shall be [******************] PanAmSat to [**********] such [************
********************] if the [********] of the party, the party's proposed use
of the transponder or [********] for terms and conditions for service, or other
reasonable and appropriate factors, lead PanAmSat [**************************]
to determine not to enter such a service agreement; nor shall PanAmSat be
obligated to [***] the capacity formerly used to provide Service to Customer
[*******] of any other [**********] that PanAmSat may also have available.
Customer acknowledges that the foregoing rights of PanAmSat: (i) are [*********]
under all of the circumstances existing as of this date; (ii) constitute
[**********************] for the [***] of a [*********] and (iii) do
[************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
38
7.5A The foregoing notwithstanding, PanAmSat shall not be permitted to
terminate this Agreement under Section 7.5(a) if, for reasons beyond the
reasonable control of Customer and any Customer Company, Customer is prohibited
by a law of general applicability from making payments to PanAmSat (a "Payment
Force Majeure") and all of the following conditions are met: (i) regardless of
any Payment Force Majeure, Customer (or a third party on Customer's behalf)
makes payment, including late payment charges, of all unpaid amounts within
either (A) sixty (60) days of the date otherwise due, or (B) ninety (90) days of
the date otherwise due (without regard to the application of the letter of
credit specified below) if prior to the Payment Force Majeure event, Customer
shall have caused a New York commercial bank, acceptable to PanAmSat, to provide
PanAmSat with a letter of credit, in form and substance acceptable to PanAmSat,
for one month's payment (as measured as of the time of the Payment Force
Majeure), entitling PanAmSat to draw down payment upon notification to it by
Customer of the existence of a Payment Force Majeure and PanAmSat shall, in
fact, have been permitted to draw down such amount (so that Customer's total
permitted late payment under this paragraph is no more than sixty (60) days);
(ii) Customer promptly notifies PanAmSat of the existence of the Payment Force
Majeure (in all cases within any grace period for nonpayment otherwise permitted
under Section 7.5(a)), uses all reasonable efforts to have the condition giving
rise to the Payment Force Majeure removed as soon as possible, and (iii)
Customer uses all commercially reasonable and legal methods to have payment made
as soon as possible, from sources (including, on Customer's behalf, from
Customer Companies) as to which the Payment Force Majeure does not apply, and
keep PanAmSat promptly apprised of such efforts.
If all of the conditions set forth above, except (i) are met,
PanAmSat shall still have the right to exercise all of the remedies stated in
Section 7.5; provided that, in such circumstances, if within one hundred and
eighty (180) days of the permitted termination of this Agreement, Customer is
able to make payments, including for the period during which this Agreement was
terminated (less any payment PanAmSat may have received from third parties for
the relevant capacity during this period), to the extent that PanAmSat has not
already committed the Service Transponders to other customers, it shall permit
Customer to recommence the operation of this Agreement, upon payment of such
amounts, the next monthly payment due, and late payment charges.
39
7.6 Rights and Obligations Upon Termination. Upon termination of this
Agreement in accordance with any of Sections 7.3, or 7.4 above, or Sections 7.7,
7.8, or 8.1 below or if this Agreement expires by its terms, [*****************
********************************************************************************
********************************************************************************
********************************************************************************
***************************************************************************] If
the termination of the entire Agreement occurs prior to the application of the
Deposit to the Service Fee payments, the unapplied portion shall be returned,
if applicable, with interest in accordance with Section 3.1 above. The
termination of this Agreement for any reason in accordance with this Agreement
shall extinguish all of PanAmSat's obligations to provide, and Customer's
obligations to accept and pay for, the Service under this Agreement, but shall
not relieve either party of any obligation that may have arisen prior to such
termination, including (without limitation), under Section 7.5 above, nor shall
termination affect the parties obligations under Article 11 ("Confidentiality")
that shall survive termination of this Agreement.
7.7 Termination for Patent Infringement. In the event that:
(a) PanAmSat's provision of the Service infringes upon the patents or
intellectual property rights of third parties; (b) such infringement exists
independent of the combination of the Service with any Customer-Provided
Facilities; and (c) as a result, Customer cannot use the Service Transponders
without infringing upon the patent or intellectual property rights of third
parties, Customer may terminate this Agreement upon thirty (30) days' notice to
PanAmSat, unless (i) such infringement ceases to exist within this thirty
(30)-day notice period; or (ii) PanAmSat agrees (to the extent that Customer is
not protected under the indemnity provided by PanAmSat's Satellite manufacturer)
to indemnify and hold harmless Customer from any claim or suit based on such
infringement and arising from PanAmSat's continued provision and Customer's
continued use of the Service Transponders on and after the date that PanAmSat
agrees to so indemnify Customer. In this latter instance, Customer agrees to
cooperate with PanAmSat and the Satellite manufacturer, as applicable, in the
defense of such claim and specifically agrees, as a condition to this indemnity,
to take all steps within its power that are required of it and/or that are
necessary for PanAmSat to take in order to receive the benefits of the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
40
Satellite manufacturer's indemnify, in accordance with the relevant provisions
of PanAmSat's contract with the Satellite manufacturer.
7.8 Early Termination Right. In recognition of the additional risks to
maintaining satellite operations beyond the specified design life of the
Satellite, Customer shall have the right, subject to the conditions specified in
this Section 7.8, to terminate this Agreement [*****************************
*******************] after the Service Date. Exercise of such termination rights
by Customer must occur, if at all, on or before the earlier of: (a)
[*****************************] of the Service Date; or (b) [****************]
after PanAmSat notifies Customer of PanAmSat's firm intention to launch a
Successor Satellite, with the intention to place it into commercial service
prior to the end of the [************************] if Customer exercises its
termination right under this Section 7.8, but in no event shall such exercise
decision be required earlier than [*****************************************]
Service Date.
ARTICLE 8. FORCE MAJEURE.
8.1 Failure To Commence Service Or To Perform. Any failure or delay in
the performance by PanAmSat of its obligation to commence or to continue to
provide Service shall not be a breach of this Agreement, if such failure or
delay results from any Act of God, governmental action (whether in its sovereign
or contractual capacity), or any other circumstance reasonably beyond the
control of PanAmSat, including, but not limited to, receive earth station sun
outage, meteorological or astronomical disturbances, earthquake, hurricane,
snowstorm, fire, flood, strikes, labor disputes, war, civil disorder, epidemics,
quarantines, embargoes, or acts or omissions of Customer or any third parties
(except that the acts or omissions of third parties acting on behalf of
PanAmSat, including PanAmSat's Satellite manufacturer and launch contractor,
shall not constitute a force majeure unless their acts and omissions are
themselves the result of force majeure conditions of the kind set forth above).
Subject to the following sentence, either party shall be permitted to terminate
this Agreement, as to the affected Service Transponder(s), if, because of force
majeure conditions: (a) after the Service Date, PanAmSat does not make Service
in accordance with the Service Specifications available, the Service
Transponders meeting the Service Specifications and their availability cannot be
recommenced within sixty (60) days; or (b) the nature of the force majeure event
makes it clearly ascertainable that PanAmSat's ability to make
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
41
available the Service from the Service Transponders meeting the Service
Specifications will not be able to recommence within this sixty (60) day period.
The foregoing notwithstanding, Customer's right to terminate, to the extent a
failure to provide Service results from a malfunction of the Satellite, shall be
governed by Section 7.3. Customer shall not be permitted to terminate this
Agreement if PanAmSat's inability to perform is due to acts or omissions of
Customer or its employees, agents, or contractors that are not in conformance
with Appendix D or for intermittent failures due to any or all of the following:
sun outages, meteorological or astronomical disturbances. In addition, in
circumstances that are not governed by Section 7.3 and that are not due to
events described in the previous sentence, if Service is not made available by
PanAmSat in accordance with the Service Specifications during a [************]
due to a force majeure condition, provided that Customer ceases use of the
affected Service Transponders during such period (except in coordination with
PanAmSat to determine if the Service can be restored to the Service
Specifications), the [*********************] due from Customer for the affected
Service Transponders during the applicable [************] shall be adjusted pro
rata to reflect the period during which Service from the Service Transponders
was not made available. [******************************************************]
ARTICLE 9. LIMITATION OF LIABILITY AND INDEMNIFICATION.
9.1 Limitation Of PanAmSat's Liability. EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 7.6 ABOVE, 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. IT IS EXPRESSLY AGREED THAT PANAMSAT's
SOLE OBLIGATION AND CUSTOMER'S EXCLUSIVE REMEDIES FOR ANY CAUSE WHATSOEVER
ARISING OUT OF OR RELATING TO THIS AGREEMENT ARE LIMITED TO THOSE SET FORTH IN
SECTIONS 5.3, 8.1, 9.4, AND 9.5 AND ARTICLE 7 AND ALL OTHER REMEDIES OF ANY KIND
ARE EXPRESSLY EXCLUDED. In no event shall PanAmSat be liable for any incidental
or consequential damages or loss of revenues, whether foreseeable or not,
occasioned by any defect in the Satellite, the Transponders or the provision of
the Service Transponders to Customer, any delay in the provision of Service to
Customer, any failure of PanAmSat to continue to provide Service, or any other
cause whatsoever.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
42
9.2 Limitation Of Liability Of Others. Without limiting the generality
of the foregoing, Customer acknowledges and agrees that it shall have no right
of recovery for the satisfaction of any cause whatsoever, arising out of or
relating to this Agreement, against (a) any supplier of services or equipment to
PanAmSat in connection with the construction, launch, operation, maintenance,
tracking, telemetry and control of the Satellite or the Service Transponder(s),
or the provision of the Service Transponders to Customer in any circumstances in
which PanAmSat would be obligated to indemnify the supplier, or (b) any officer,
director, employee, agent or partner of (i) PanAmSat or (ii) any service or
equipment provider under 9.2(a). Except as provided in Article 17 and Appendix L
and subject to PanAmSat's rights as a third party beneficiary under Section
1.4(b) of this Agreement, PanAmSat acknowledges and agrees that it shall have no
right of recovery for the satisfaction of any cause whatsoever, arising out of
or related to this Agreement, against any officer, director, employee, agent or
partner of Customer, except with respect to any partner or agent to the extent
arising out of the transmission of signals to the Satellite by it or on its
behalf.
9.3 Indemnification. Customer shall defend and indemnify the "PanAmSat
Group" (defined herein to mean PanAmSat and all officers, directors, employees,
agents and partners of PanAmSat) from any claims, liabilities, losses, costs, or
damages, including attorneys' fees and costs, arising out of the provision of
Service to Customer from, or Customer's use of, the Satellite or the Service
Transponder(s), that (a) is caused by the fault or negligence of Customer, (b)
arises under a warranty, representation, or statement by Customer to any third
party in connection with transmissions carried on the Service Transponders, (c)
arises out of the content of programming, including any libel, slander,
obscenity, indecency, pornography, religious fanaticism, or political advocacy,
infringement of copyright, infringement of patents, breach in the privacy or
security of transmissions; or (d) arises out of disputes between or among
Customer and any program supplier and/or its program recipients. The limitation
of liability set forth in this Article 9 shall apply to, and the
indemnifications set forth in this Article 9 shall run in favor of, the PanAmSat
Group.
9.4 Equitable Relief. Nothing contained in this Article 9 or elsewhere
in this Agreement shall preclude either party from seeking injunctive relief to
prevent
43
a willful breach or to compel performance in the event of a willful failure to
comply with this Agreement.
9.5 Patents, Copyrights, Mask Work Rights and Proprietary Computer
Programs. To the extent that the manufacturer of the Satellite or any part
thereof may be obligated to indemnify PanAmSat for any infringement of any
patent, copyright, "mask work" (as defined in the Semiconductor Chip Protection
Act, 17 U.S.C. Secs. 901-14) right or other proprietary computer right with
respect to the manufacture of, or provision of services from the Satellite and
the Service Transponders and such indemnification obligations may be passed
through to protect PanAmSat's customers, PanAmSat shall pass such protection
through to Customer; provided, that PanAmSat makes no representation or warranty
that any manufacturer's indemnification obligation exists or will continue to
exist or may be passed through; and provided further that, to the extent such
indemnification rights are limited, PanAmSat may equitably share such
indemnification protections for the common benefit of PanAmSat and its
customers.
9.6 Indemnitor Rights. If Customer is obligated to provide
indemnification pursuant to this Article 9 or PanAmSat undertakes to indemnify
Customer under Section 7.7, the indemnifying party (the "Indemnitor") shall
promptly defend any claims against the party entitled to indemnification (the
"Indemnitee") with counsel of Indemnitor's choosing at its own cost and expense.
The Indemnitee shall allow the Indemnitor to control the defense and cooperate
with, and assist as reasonably requested by, Indemnitor in the defense of any
such claim, including the settlement thereof on a basis stipulated by Indemnitor
(with Indemnitor being responsible for all costs and expenses of defending such
claim or making such settlement); provided, however, that (1) Indemnitor will
not, without the Indemnitee's consent, settle or compromise any claim or consent
to any entry of judgment which does not include the giving by the claimant or
the plaintiff to the Indemnitee of an unconditional release from all liability
for which the Indemnitor does not fully indemnify the Indemnitee with respect to
such claim, (2) the Indemnitee shall be entitled to participate at its sole
expense in support of Indemnitor's action in the defense of any such claim and
to employ counsel at the Indemnitee's own expense to assist in the handling of
such claim, and (3) the Indemnitee shall have the right to pay, settle or
compromise any such claim as to itself, provided that in such event Indemnitor
shall be relieved of any liability or
44
obligation which would otherwise then or thereafter have existed or arisen in
respect of such claim.
9.7 Limitation of Liability [*************************************]
Customer's money damages exposure to PanAmSat with respect to any breach of
obligations under Section [***************************************************
********************************************************************************
*************************] shall be no greater than would be PanAmSat's
liability exposure to Customer for a breach by PanAmSat of its obligations under
that Section; i.e., [*************] is [***********] to [*******************]
and neither party is precluded from seeking injunctive relief in the event of a
willful breach.
ARTICLE 10. SUBORDINATION AND ASSIGNMENT.
10.1 Intentionally Deleted.
10.2 Intentionally Deleted.
10.3 Subordination to Other Entities. Customer acknowledges and agrees
that PanAmSat may grant security interests in the Transponders and/or the
Satellite. In such event, provisions that are the same as attached to this
Agreement as Appendix J or, to the extent that changes are requested by another
secured party, similar provisions shall apply.
10.4 PanAmSat's Right To Assign. Customer agrees that PanAmSat may
assign its rights and interests under this Agreement and to the Satellite and
any or all sums due or to become due under this Agreement to an assignee for any
reason; provided that, except with respect to the granting of a security
interest or the assignment of a right to payment, such assignee agrees in
writing to assume all of the duties and obligations of PanAmSat hereunder.
Customer agrees that upon receipt of notice from PanAmSat of such assignment,
Customer shall perform all of its obligations directly for the benefit of the
assignee and shall pay all sums due or to become due directly to the assignee,
if so directed. Upon receipt of notice of such assignment, Customer agrees to
execute and deliver to PanAmSat such documentation as assignee may reasonably
require from PanAmSat. As used in this Section 10.4, assign shall mean to grant,
sell, assign, encumber or otherwise convey directly or indirectly, in whole or
in part.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
45
10.5 Customer Assignment. Customer may assign its rights under this
Agreement only in whole, only to an Approved Participating Company (or any
entity Controlled by one or more of the Approved Participating Companies), and
only if the following conditions are satisfied: (a) the proposed assignee in
writing assumes all of Customer's obligations with respect to this Agreement and
agrees to be treated as Customer for all purposes under this Agreement; (b) such
written undertaking is delivered to PanAmSat at least thirty (30) days in
advance of the assignment; (c) Customer guarantees assignee's performance of
payment obligations which obligations shall also continue to be subject to the
guarantee requirements stated under Article 17 below; and (d) either (i) the
assignee agrees in writing to continue the programming practices of Customer, or
(ii) the assignee is one of the Approved Participating Companies as to whom (as
shown in Appendix I) PanAmSat has consented and said assignee agrees to follow
the assignor's current programming practices (as exist as of the date of this
Agreement) with respect to the use of the Service Transponders, or (iii)
PanAmSat consents to such assignment in advance and in writing, such consent not
to be unreasonably withheld or delayed; it being understood that PanAmSat may
withhold its consent only if PanAmSat determines, in good faith, that some or
all of the assignee's programming may be pornographic, involve religious
fanaticism or political advocacy, obscene, indecent, slanderous, or in violation
of any governmental programming restrictions. Without limitation, any assignee
shall be required to use the Transponders assigned in accordance with Section
1.4.
10.6 Successors. Subject to all the provisions concerning assignments,
above, this Agreement shall be binding on and shall inure to the benefit of any
successors and assigns of the parties. The foregoing notwithstanding, no
assignment of this Agreement shall relieve either party of its obligations to
the other party, without the express written consent of the other party, not to
be unreasonably withheld. 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.
10.7 No Resale. Except as expressly permitted in Sections 1.4, 1.6, and
10.5, the Service Transponders are being provided for Customer's own use and in
no event shall Customer be permitted to resell them, in whole or in part, to any
other person or entity. This Section 10.7 shall not be construed to prohibit the
Customer from subleasing capacity to the extent permitted in Section 1.4 hereof,
for usage and
46
[*****************] purposes that are consistent with Customer's obligations to
PanAmSat under this Agreement.
ARTICLE 11.
11.1 Publicity. The terms of this Agreement, the transactions
contemplated herein, and the information exchanged in their connection shall be
kept strictly confidential by the parties and their advisors and shall be used
solely for the purposes contemplated by this Agreement and specifically not in
any way for purpose of competing with any party hereto or any of its Affiliates;
provided, however, that the parties may disclose such information: (i) to their
respective shareholders, directors, officers, partners, lenders, insurance
agents, accountants, and advisors on an as needed and confidential basis and the
foregoing agree (or are subject to agreement or other obligations of
professional responsibility (e.g., lawyers)) to keep such information
confidential; (ii) to regulatory authorities or the general public if and to the
extent a party is required by law or securities exchange rules or regulations to
make such disclosures (including, but not limited to, in connection with a
public offering); (iii) to actual and proposed potential partners, investors,
lenders, and successors in interest; and (iv) News, Televisa, TINTA, Globo,
Multi-Country Platform entities under any of their Control and such venture as
some or all of them may form in connection with the provision of DTH services on
an as needed and confidential basis. Subject to the proviso of the preceding
sentence, the parties will mutually agree on the timing and substance of the
initial announcement of this Agreement to the general public. To the extent
practicable, any other disclosures to the general public will be coordinated and
approved by the parties prior to release.
ARTICLE 12. REPRESENTATIONS, WARRANTIES AND COVENANTS.
PanAmSat has or will use all reasonable efforts to obtain by the
Service Date and maintain all consents and authorizations from the FCC and other
governmental entities that may be necessary to provide the Service as
contemplated in this Agreement; provided that, except as it may relate to
actions that may need to be taken with third parties or non-U.S. governmental
agencies a "best efforts" standard shall apply to PanAmSat's activities before
the FCC with respect to PAS-5. Subject to the understanding that certain
consents and authorizations have not yet been obtained and that certain
applications in this regard may be pending or
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
47
subsequently filed with the FCC or other applicable governmental entity,
PanAmSat and Customer each represents and warrants to, and agrees with, the
other that:
12.1 Authority. 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 document, instrument or agreement by which it is bound.
12.2 Partnership And Corporate Approvals. It has taken all requisite
partnership or corporate action, as applicable, 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.
12.3 Consents. The fulfillment of its obligations will not constitute a
material violation of any existing applicable law, rule, regulation or order of
any governmental authority. All necessary or appropriate public or private
consents, permissions, agreements, licenses or authorizations necessary for the
performance of its obligations under this Agreement to which it is subject have
been obtained, or it will use all reasonable efforts to obtain, in a timely
manner.
12.4 Litigation. To the best of its knowledge, there is no outstanding
or threatened judgment, pending litigation or proceeding, involving or affecting
the transactions provided for in this Agreement, except as set forth in the
"Disclosure Schedule" set forth in Appendix G or as has been previously
disclosed in writing by either party to the other.
12.5 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.
12.6 Good Faith. Each party shall carry out its obligations under this
Agreement, including (without limitation) with respect to all matters requiring
that a consent be given, in good faith.
48
ARTICLE 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND
COVENANTS OF PANAMSAT.
13.1 Orbital Location. PanAmSat has been authorized by the FCC to
construct, launch and operate PAS-5 in geostationary orbit at 58o West
Longitude. PanAmSat shall use such orbital location (or, to the extent that
PanAmSat obtains FCC authority to do so, any location within five degrees of 58o
X.X.), unless prevented by subsequent order of the FCC, in which event PanAmSat
shall use such orbital position(s) closest to the range identified above that
the FCC may designate. PanAmSat shall use all reasonable efforts to resist any
move of the Satellite from outside the orbital range specified above. In the
event that PanAmSat is required to change the Satellite's orbital location, such
change shall not affect the continuing validity of this Agreement, except to the
extent such change prevents PanAmSat from providing Customer with Transponders
that meet the Service Specifications, in which event the termination provision
set forth in Section 7.3 shall apply. The foregoing notwithstanding, the parties
agree that the placement of the Satellite outside of the orbital range from 53o
West Longitude through and including 63o West Longitude shall, for purposes of
Section 7.3, constitute a failure of the Service Transponders to meet their
Service Specifications.
13.2 Government Authorizations. PanAmSat shall use all reasonable
efforts to obtain and maintain all necessary governmental authorizations or
permissions to operate the Satellite and to comply in all material respects with
all FCC and other governmental regulations regarding the operation of the
Satellite; provided that, except as it may relate to actions that may need to be
taken with third parties or non-U.S. governmental agencies, a "best efforts"
standard shall apply to PanAmSat's activities before the FCC with respect to
PAS-5.
PanAmSat will, as Customer may reasonably request, cooperate with
and assist Customer in compliance with Customer's obligations under [********
*****************************************************] in connection with
Customer's use of the Service provided hereunder; provided such actions required
of PanAmSat under this paragraph will not (a) subject it to the jurisdiction of
any governmental entity of the [**********************] or (b) result in the
incurrence by PanAmSat of any material costs or liabilities.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
49
13.3 Operational Reports. PanAmSat shall provide Customer a quarterly
written operational report concerning the Satellite which shall include
information regarding the status of Spare Equipment and updated projections
regarding the predicted life of the Satellite. PanAmSat shall also notify
Customer as soon as practicable of any significant anomalies with respect to the
Satellite which have a material effect on the Service Transponder(s) or
materially reduce the projected life of the Satellite.
ARTICLE 14. Intentionally Deleted.
ARTICLE 15. MISCELLANEOUS.
15.1 Applicable Law And Entire Agreement. This Agreement shall be
interpreted according to the laws of the State of New York, U.S.A. Subject to
the following sentence, the parties agree that the appropriate and exclusive
forum for any disputes arising under this agreement shall be the United States
District Court for the Southern District of New York. Each party consents to the
jurisdiction of this court, but, if that court determines it lacks jurisdiction,
consents to the jurisdiction of the State courts of New York. The parties agree
to waive any or all rights they may have to a jury trial with respect to
disputes arising under this Agreement. Each party agrees that service of process
in any action or proceeding shall be deemed sufficient if mailed, first class,
postage prepaid, to the other at the address set forth in Section 15.5(b), as
the same may be changed in accordance with that Section. This Agreement may not
be amended or modified in any way, and none of its provisions may be waived,
except by a prior writing signed by an authorized officer of each party.
15.2 Severability; Reconstitution. Nothing contained in this Agreement
shall be construed so as to require the commission of any act contrary to law.
In the event that the transactions set forth in this Agreement are challenged
before a court or regulatory body of competent jurisdiction by other persons or
entities not parties hereto, PanAmSat and Customer agree that each will use its
all reasonable efforts before such court or regulatory body to support the
continuing operation of this Agreement by its terms. If any provision of this
Agreement shall be invalid or unenforceable, the provisions of this Agreement so
affected shall be curtailed and limited only to the extent necessary to permit
compliance with the minimum legal requirements; provided that if the effect is
such so that the economic relationships
50
or benefits and burdens contemplated under the Agreement are substantially
affected, the parties shall seek and use all reasonable efforts to reconstitute
this Agreement so as best possible to restore to each party to the economic
position contemplated in this Agreement.
15.3 No Third Party Beneficiary. The provisions of this Agreement are
for the benefit only of Customer and PanAmSat, and, except as provided under
Sections 10.3 and 17.1 and Appendix J, no third party may seek to enforce or
benefit from these provisions, except that both parties acknowledge and agree
that the provisions of Sections 9.2 and 9.3 are intended for the benefit of the
PanAmSat Group. Any member of the PanAmSat Group shall have the right to
enforce, as a third party beneficiary, the provisions of Sections 9.2 and 9.3
either by (a) an action brought solely by itself, or (b) joining PanAmSat, or
other members of the PanAmSat Group in bringing an action against Customer for
violation of Sections 9.2 or 9.3. The foregoing notwithstanding, both parties
acknowledge and agree that the non-interference requirements of Section 4.1 are
intended for the benefit of both PanAmSat and all other Protected Parties,
except that no Protected Party who has the right to uplink to the Satellite
shall be entitled to third party beneficiary rights to enforce Section 4.1
against Customer, unless the agreement giving such other Protected Party the
right to uplink to the Satellite also gives Customer comparable third party
beneficiary rights against it. Any other Protected Party shall have the right,
as a third party beneficiary (a) to enforce the non-interference requirements of
Section 4.1, against Customer directly, in an action brought solely by itself,
or (b) to join with PanAmSat or any other Protected Parties in bringing an
action against Customer for violation of the non-interference requirements of
Section 4.1.
15.4 Non-Waiver of Breach. Either party 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 may at any time,
upon notice given in writing to the breaching party, 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.
51
15.5 Notices.
(a) Telephone Notices. For the purpose of receiving notices
from PanAmSat regarding preemption, interference or other technical problems,
including with respect to Transponder failure and restoration, Customer shall
maintain at each earth station transmitting signals to the Satellite a telephone
that is continuously staffed at all times during which customer is transmitting
signals to the Satellite and an automatic facsimile machine in operation and
capable of receiving messages from PanAmSat at all times. THOSE PERSONS STAFFING
THE EARTH STATION, FOR THE PURPOSES OF RECEIVING SUCH MESSAGES FROM PANAMSAT,
MUST HAVE THE TECHNICAL CAPABILITY AND ABSOLUTE AUTHORITY IMMEDIATELY TO
TERMINATE OR MODIFY THE TRANSMISSION IF NOTIFIED BY PANAMSAT. PanAmSat shall
also maintain a telephone that is continuously staffed for the purposes of
receiving notices regarding the matters identified in the first sentence of
this Section 15.5(a). All such notices shall be made in English and shall be
effective upon the placement of a telephone call from one party to the other.
Each party shall promptly confirm all telephone notices that may be given under
this Agreement in writing in accordance with Section 15.5(b) below. Any
unsuccessful efforts to reach a party by telephone shall be followed by telecopy
and telephone calls to other contact points, e.g., the corporate headquarters of
the other party, that said party may have provided the notifying party.
(b) General Notices. All notices and other communications from
either party to the other, except as otherwise stated in this Agreement, shall
be in English writing and, shall be deemed received upon actual delivery or
completed facsimile addressed to the other party as follows:
To PanAmSat if by recognized courier PanAmSat International Systems, Inc.
service or by personal delivery to One Pickwick Plaza
its principal place of Xxxxxxxxx, Xxxxxxxxxxx 00000
business: Attention: General Counsel
To PanAmSat if by facsimile: 000-000-0000
Attention: General Counsel
52
With a copy to:
If by recognized courier service or Goldberg, Godles, Wiener & Xxxxxx
by personal delivery to its principal 0000 Xxxxxxxxxx Xxxxxx, X.X.
place of business: Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxxxx
If by facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxxx
To Customer if by recognized courier c/o Innova, S. de X.X.
service or by personal delivery Xxxxxxxxxxx Xxx 000
to its principal place of Piso 8
business: Xxx. Xxx Xxxxx 00000
Xxxxxx
To Customer if by facsimile: (000)-000-0000
Attention: Chief Executive Officer
With a copy to:
If by recognized courier service or The News Corporation Limited
by personal delivery to its 1211 Avenue of the Americas
principal place of business: Xxx Xxxx, Xxx Xxxx 00000
Attention: Group General Counsel
If by facsimile: 000-000-0000
and
The News Corporation/Sky
Latin America
00000 Xxxx Xxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If by facsimile: 000-000-0000
Attention: Executive Vice President,
Business Affairs
and
If by facsimile: 000-000-0000
Attention: Executive Vice President,
Legal Affairs
53
and
Televisa International LLC
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
If by facsimile: 000-000-0000
and
Grupo Televisa S.A.
Xxxxxxx Xxxxx xx Xxxxxxx #0000
0xx Xxxx, Xxxxxxx Xxxxx Xx
Xxxxxx, D.F. 01210
Attention: Chief Financial Officer
If by facsimile: (000)-000-0000
and
Xxxxxx X. Xxxxxxxxx
Xxxxxxxxx Xxxxxx & Xxxxxx P.L.L.C.
0000 X Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
If by facsimile: (000)-000-0000
Each party will advise the other of any change in the address, designated
representative or telephone or facsimile number.
For the avoidance of doubt, notices and certifications given by either
party to the other while relevant to the timing of further action by the
notified party shall not be deemed in and of themselves to establish the fact
stated in the notice. So, for example, under Section 5.3, the fact that Customer
notifies PanAmSat that a Transponder does not meet the Service Specifications
and/or that PanAmSat notifies Customer that a Transponder has been restored to
its Service Specifications shall not be deemed conclusive evidence, in and of
itself, of failure and/or restoration. Each party shall timely notify the other
if said party believes that any such notice is inaccurate.
54
15.6 Headings. The descriptive headings of the Articles and sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
15.7 Documents. Each party agrees to execute, and, if necessary, to
file with the appropriate governmental entities and international organizations,
such documents as the other party shall reasonably request in order to carry out
the purposes of this Agreement.
15.8 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.
15.9 Absence of Partnership. The relationship between the parties shall
not be that of partners and nothing in this Agreement shall be construed to
create a partnership between such parties.
ARTICLE 16. SUCCESSOR OR COLLOCATED SATELLITES.
16.1 Successor or Collocated Satellite.
(a) PanAmSat Elects to Launch.
(i) In the event that PanAmSat, or a PanAmSat Company
(collectively referred to as "PanAmSat" for purposes of this Section 16.1)
determines to launch a new "Collocated Satellite" or a "Successor Satellite"
(each as defined herein) during the Term hereof or during the survival period
specified in clause (f) below, with Ku-band transponders covering
[*************] the [*********************]as the Service Transponders (and with
primary coverage focused over [************************] that are [*************
*************] to or [********************] from the Service Transponders
("Mexico Ku-Band Transponders"), PanAmSat shall give Customer the right to
[******] or enter into a [********************************] with respect to, at
Customer's election, some or all (but in no event less than the lesser of (A)
[***********] and (B) an amount equal to [***********] of the [*******] Ku-band
[**********] on such satellite, a [*****] Service Agreement") of the Mexico
Ku-Band Transponders or [*******************] on such Collocated and/or
Successor Satellite at a price to be negotiated but not to
[*****************************] as determined below, and on other terms and
conditions to be negotiated in good faith, but which shall be
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
55
[***********************] in relevant part, to this Agreement, [*********] as
appropriate to reflect [********] in [*******] whether payment is [*********
*********] changes in [*********] and [****************************************]
and other [************] in circumstances that reasonably require [***********]
in, or [*********] from, the terms and conditions stated herein. The negotiation
period for each Collocated or Successor Satellite shall be for [*************]
during which time each party agrees to negotiate in good faith exclusively with
the other party (i.e., PanAmSat with respect to the Mexico Ku-band Transponders
subject to negotiation and Customer and the Customer Companies with respect to
transponder capacity to be used for the provision of DTH Service to the
[*******] Territory).
(ii) During the [*****************] negotiating
period, PanAmSat agrees to [******] Customer an end of life service contract
with service fees for a [****] Service Agreement on the applicable satellite
that shall, subject to the qualifications stated below, be
[*******************************************************************************
********************************] per month per Transponder increased for
[***********] by a percentage equal to the increase in the [***] (as defined
below) from the Service Date of the PAS-5 Service Transponders to the month and
year of the Service Date of the applicable Successor or Collocated Satellite
(with adjustment as necessary to reflect the change in the [***] from the time
of the negotiation to the Service Date of such Successor or Collocated
Satellite). The [***] means the [***********************] now known as the
[*************************************************************] for [***********
********************************************] for [***************]. If such
[***] shall be discontinued, the foregoing calculations shall be made using a
reasonably equivalent successor or comparable measure of [***********] in the
[******************] in the United States as reasonably determined by PanAmSat.
The price per Transponder as determined under this clause (ii), modified, if
applicable, under clause (iii) below, is referred to in this Agreement as the
[**************]
(iii) The foregoing notwithstanding, PanAmSat shall
be permitted to [*******] the service fees above that stated above with respect
to the [***] to reflect any extraordinary and substantial increase in its [****]
and [**************] in [*******************************] and
[***********************] and [***********] a Successor or Collocated Satellite
relative to such costs as of the date hereof, including increases in [*********
***********] or the need to purchase [******************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
56
increases in launch [***********] rates in excess of [****] of the [*********]
value (unless the [*******************] of launch [**********] is less than
[***********] to [*****************************************] because the [******
****] are [********] or other extraordinary factors the failure to take into
account of which would frustrate the intent of this [***************] which is
to [********************] that allows PanAmSat to earn a [**********************
***************] PanAmSat shall also be permitted to [********************] to
reflect any [*****************************] that result from [*************] a
satellite above and beyond the [***************************] of PAS-5 adjusted
to reflect then [*****************] technological standards.
(iv) The [**************] negotiating period may be
initiated by either party on notice to the other at any time within the time
period set forth below. Each negotiation period (per Collocated or Successor
Satellite) shall not begin earlier than the date on which both of the following
conditions have been satisfied: (A) PanAmSat notifies Customer of, or publicly
announces, a [***********] to launch a Collocated or Successor Satellite; and
(B) [*************] prior to the proposed launch of the Collocated or Successor
Satellite. Each negotiation period shall not commence, if at all later than [***
**************] prior to the date that the applicable Collocated or Successor
Satellite is scheduled to be launched. If negotiations are not initiated by such
date or successfully concluded with a binding purchase or service agreement
within the [**************] negotiation period, unless Customer has given
PanAmSat a "Customer's Offer" (as defined below), neither party shall have any
further obligation pursuant to this Section 16.1. The conclusion or failure to
conclude such an agreement for a transponder or transponders on a Collocated or
Successor Satellite shall not otherwise affect the parties' obligations
hereunder.
(v) At any time prior to the end of the applicable
negotiation period specified above, Customer shall have the right to make to
PanAmSat Customer's [************************] ("Customer's Offer") of the
[*****] and other [********] terms and conditions (sufficiently detailed, if
accepted, to form a binding contract) on which it is willing to [********] or
enter into an [******************************] for a [*******] number of Mexico
Ku-band Transponders on the applicable Collocated or Successor Satellite.
(vi) If Customer makes the Customer's Offer, for as
long as it is held open (i.e., that it may be accepted by PanAmSat without
Customer's subsequent right to withdraw it), until [****************] after the
launch of the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
57
Collocated or Successor Satellite, PanAmSat will not, without [********]
offering the Customer the [************] to do so, and for a period of
[**********************] following notice of such offer to Customer, enter into
a [*********] or [*******************************************] for the [*****
***************] Mexico Ku-band Transponders on the same Satellite than stated
in Customer's Offer that, overall, taking into account the price (which, for
purposes of comparison, will be calculated on a [***************************
********************] by PanAmSat, but notified to Customer so that Customer may
make an [**********] in its offer to reflect this [*****************] and
[********] terms and conditions (but not [****************] individual terms and
conditions) are [**************************] to PanAmSat than, Customer's Offer.
(b) Related Collocated Satellite Rights. PanAmSat shall notify
Customer of any determination by PanAmSat to launch a Collocated Satellite, even
if the Satellite will [***] have [********] transponders that fall within the
definition of clause(a)(i) above for which Customer's rights under this Article
16 apply, if the [*******] of the [***] would [*******] the [***] of the
[***************************] on the Collocated Satellite for the provision of
Service to Customer for use in the [*******] Territory on a future Collocated
Satellite. (For the avoidance of doubt, in no event shall PanAmSat be permitted
to launch a Collocated Satellite which uses frequencies that would [********]
with the Service Transponders so as to [********] their meeting their
[**********] Specifications.) Before committing to such a Collocated Satellite
that would [****************] the use of [**********
************************************] by Customer in the [*********] Territory,
PanAmSat shall give Customer the opportunity to exercise its rights, if still
extant, under clause (c) below to require PanAmSat to launch a Collocated
Satellite, subject to applicable [******************] and [**************
***********] employing such [********************] with Ku-band [********] for
use in the [***********] Territory. Customer shall have until the later of: (i)
[*****************] from PanAmSat's notice to Customer, or (ii) until the
[*****************************] specified below, to exercise such rights.
Customer shall not be required to make any decision
regarding [*************************************************************] either
under this clause (b) or clause (a) above [*************************] nor
earlier than March 31, 1999, as to any [*********************] that is placed
into commercial service before that date (the "Decision Period"). In addition,
PanAmSat will not require Customer to make a
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
58
decision whether [**************************************************************
******] (and the "Decision Period" will be so extended), unless PanAmSat
[**********************] to [********************************] that it acquires
on a Collocated Satellite to any third party for any lawful purpose, subject to
Customer's ultimate obligations therefore, consistent with Section 10.6 of this
Agreement (i.e., an [****************************] the [*********************
***********************] without the consent of the other party).
Accordingly, by way of example, if PanAmSat notifies
Customer in [*********] of PanAmSat's [*****************] a
[********************] either with Mexico Ku-band Transponders or [************
************] Transponders that would have a [**********************************
********************************] to have Mexico Ku-band Transponders, Customer
[**********************] whether to [**********] an agreement to [************]
on such Satellite or [***********************] of a Satellite employing such
frequencies for Mexico Ku-band Transponders until [*******************] such
[*********************] could not be placed into [******************************
*********] unless Customer's right to so decide is extended until
[**************] and, unless PanAmSat allows Customer the right specified above
to [********************] Customer will have until [***************] to make a
decision, effectively [********] PanAmSat from committing to any [*************]
of such [********************************]
The foregoing notwithstanding, if Customer requests
PanAmSat to provide [****************************] under Section 1.8(b)(ii)
above, Customer shall [*****] to have the right to [*****] a decision to
[***************] from a [*********************] Informal discussions or
exchange of correspondence by the parties regarding the possibility of a
[***************************] including (without limitation), consultation under
clause (d) below, that does not clearly state that it is intended as a notice
under this clause or a request under Section 1.8(b)(ii) shall not be deemed to
give rise to rights under this or related provisions.
(c) PanAmSat Obligated to Launch. Customer may [*********
****************] to [*********************] with the [***********************]
and [*********] of a [***************] and/or, a Successor Satellite under the
following circumstances:
(i) The obligation may be applied only to a
[*************************] for PAS-5, [**********************] and, if Customer
agrees to [************************] on a
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
59
[****************************************] of the Service Date of PAS-5, [***
****************************************************] each with at least twelve
"Mexico Ku-band Transponders," meeting the criteria set forth in clause (a)
above;
(ii) Customer shall use all reasonable efforts to
[*****************] exercise of rights under this Section 16.1 with other users
of PAS-5 so that the same [**********************] may be used to satisfy the
needs of each entity, but placement into service of such Satellite shall not be
unreasonably delayed to accommodate such coordination;
(iii) Customer must [******************] or enter
into [**********] of [**********************] for at [********************]
Ku-band transponders on each satellite that PanAmSat is required to cause to be
[**********************************] provided that PanAmSat may [******]
Customer to [**********************] Ku-band transponders if Customer is
otherwise unwilling to do so, but only if PanAmSat grants Customer the right to
assign to any third party for any lawful purpose the number of transponders
above [**] ("Extra Transponders") that Customer is required to take (subject to
Customer's ultimate obligations as under Section 10.6) and PanAmSat agrees to
use reasonable efforts to assist Customer in assigning its rights to such
capacity;
(iv) Except under circumstances in which Customer is
acting in response to a notice given to it by PanAmSat under clause (b) of this
Section 16.1 of PanAmSat's intention to launch a Collocated Satellite, all or
substantially all of the [*********] provided to it under this Agreement must be
[**********] Customer's DTH Service and, at the time that such required
Satellite is placed in service, all [***********] provided under this Agreement,
with the exception of any Extra Transponders that Customer may be
[****************] under the previous clause (iii), may only be [************]
the [**********] of DTH Service;
(v) PanAmSat shall not be obligated to proceed with
[*************] until all [************************************] or other
[********************************] and [***************************************]
have been obtained or resolved. PanAmSat shall use all reasonable efforts to
obtain [**************************************] and to resolve such other
issues, provided that PanAmSat will use efforts in respect of Customer's
[**********] at least as great as it has used or uses during the [*********]
period for other capacity. If permitted by law, PanAmSat will go
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
60
forward in advance of such resolution if Customer [****] for and [******] the
[*************] (e.g., [************] and [***************] of proceeding along
such a course);
(vi) PanAmSat may [********] Customer to [*****] as
and [***************] the date that [**********************] are due, [*******
*******] PanAmSat's [*******] in [***********] and [***********] the Satellite
(including, without limitation, the [*******] of [***************************
************************] or other [***************] and launch [***********] In
such event, PanAmSat shall [********] such [*******************] against the
[*****************] otherwise due for the Collocated or Successor Satellite
[************************] at a rate of [*******************] per annum;
(vii) If Customer requires PanAmSat to proceed with
the construction, launch and operation of a Successor or Collocated Satellite,
the purchase price or service fees for transponders on such satellite, unless
otherwise agreed, shall be set in accordance with the [**************]
established under Section 16.1(a) above. Other terms of the agreement to
[****************************] shall be negotiated between the parties in good
faith, shall be [**********************] in relevant part, to this Agreement,
[************] as appropriate to [************************] whether
[*******************************************************************************
***************************************] and other [***********] in
circumstances that reasonably require [*********************************
*******************************************] herein; and
(viii) If Customer exercises its rights under this
Section 16.1(c) to require the construction of a Successor Satellite, it shall
do so sufficiently in advance so that: (A) a Successor Satellite for PAS-5 can
be scheduled to be available (subject to the conditions stated herein, at
Customer's election) either [*************************************************
***********] of PAS-5 (an "Early Successor Satellite") or, provided that the
termination right specified in [**********] above is not exercised, by such time
that the underlying satellite is to be taken out of service in accordance with
[***********] above, and (B) a Successor Satellite for a Collocated Satellite,
if any, can be scheduled to be available by the time that such Collocated
Satellite is to be taken out of Service.
(d) Consultation. PanAmSat will consult with Customer on the
planning and design of Successor and Collocated Satellites (including, without
limitation, the Ku-band transponders, [***************] etc.) intended for
[********
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************************] it being understood that [**********************]
(e.g., [******************] that [*************] may be [***********] to
Customer at [****************] and beyond the [*************] stated in clause
16.1(a)(ii) above, if applicable.
(e) Condition of [**************] Customer shall cease to have
any rights under this Article 16 if there is any [*********************
*************] unless a [*****************************] of Customer remains with
the [**********************] which shall include Televisa, who, as of the date
hereof or, if applicable, as of the date that TINTA becomes a Founding Partner
(but without regard to any equity held as of such date by anyone other than a
Founding Partner), held a majority of the voting equity of the Customer.
Customer shall [********************] under clause (c) above if Customer
[***********] to have any [****************] under Section 1.8(a)(ii)(B). If
Customer [*********] to have obligations under Section 1.8(a)(ii)(B), Customer
shall [*******] to have any further rights under this Section 16.1 vis-a-vis
Collocated Satellites other than with respect to [***************************
********************] that may be already subject to a [*********************
********************************] between PanAmSat and Customer at that time.
(f) Survival. The termination of this Agreement under Section
7.4 or, if the number of Service Transponders that meet their Service
Specifications [******************] under Section 7.3, shall not
[**************] the parties [***********************] under Section 16.1, until
such time, if it has not already done so, as PanAmSat makes available to
Customer for [************] or [***************] a Collocated or Successor
Satellite (including, without limitation, an "Early Successor Satellite"). If
Customer then enters into a [***************] Agreement, the [*****************
*******************] of this Section 16.1 shall be [***************************
************] in that agreement, provided that in [**] right shall such rights
[*******] beyond [****************] At such time as such [******************]
Agreement is entered or at the [********] "Negotiation Period" (as defined in
Section 16.1) without such a [****************] Agreement being entered (except
for the operation of Section 16.1(a)(vi) as to the satellite that had been under
negotiation, if a Customer's Offer was made), this Section 16.1 shall
[******************************]
(g) Definitions. For purposes of this Agreement, the term
"Successor Satellite" shall mean any satellite containing [*****************]
that PanAmSat launches or causes to be launched to replace PAS-5 (or, if
Customer makes a [****************] Agreement for [************] on a
[******************] to [*************]
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such [**********************] at its presently assigned location or at such
[******************************] to which the FCC may authorize PAS-5 to be
moved, or, to the extent that this Section 16.1 survives the termination of this
Agreement under clause (f) above, the [**********************] of PAS-5 from
which Customer [******************] provided under this Agreement. For purposes
of this Section 16.1, the term "Collocated Satellite" shall mean any new
Satellite (i.e., [***] one that has [***********] launched as of the date of
this Agreement), other than successor satellite(s) to previously launched
satellites, containing Ku-band capacity that PanAmSat launches or causes to be
launched to be in the same Orbital Slot as PAS-5 while PAS-5 is still in
[*******************] or, to the extent that this Section 16.1 survives the
termination of this Agreement under clause (f) above, the
[***********************] of PAS-5 from which Customer [******] the
[*************] provided under this Agreement.
ARTICLE 17. GUARANTIES.
17.1 The Guaranties. Each party's entry into this Agreement is
expressly conditioned upon the contemporaneous execution and delivery to
PanAmSat of the several guaranties of Televisa, News and TINTA (the "Original
Guarantors") in the form set out in Appendix L. If said Guaranties are not
executed and delivered to PanAmSat on the date of this Agreement, this Agreement
shall be null and void. PanAmSat agrees that, if the
[********************************************************] in Customer is
[**********] PanAmSat shall, subject to PanAmSat's prior written consent, not to
be unreasonably withheld, conditioned or delayed, allow the
[***********************************************] to reflect their interests by
substituting for the [******************************] the guarantees of
[**************************************] (so that [********
***************************************************************] obligations of
Customer under this Agreement), provided that the [*****************] are of
[**********************************************************] (as of the date
hereof) and provide PanAmSat with their guaranties in the form set out in
Appendix K. PanAmSat acknowledges and agrees that the guarantors under this
Section 17.1 are third party beneficiaries of the provisions of this Section
17.1 regarding adjustments to guaranteed amounts and are entitled to enforce
said provisions directly against PanAmSat.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 18. TINTA OPTION.
TINTA may elect, on notice to PanAmSat, to be given no later than May
4, 1998, to be deemed a Founding Partner, in which event TINTA shall also be
deemed to be a Customer Company. If TINTA does not exercise this option, it will
not be deemed a Founding Partner and it will only be deemed to be a Customer
Company if (and for so long as) it has a voting equity in Customer that is
higher than ten percent (10%), it being understood that, as of the Execution
Date, TINTA's interest is exactly ten percent (10%). For the avoidance of doubt,
by operation of Section 1.4(c) of this Agreement, if TINTA becomes a Customer
Company, its "Affiliates" shall also be deemed Customer Companies.
ARTICLE 19. INDEX TO DEFINED TERMS.
For ease of reference, there follows a list of defined terms, which
identifies the place in this Agreement where each such term is defined:
Defined Term Defined At:
Additional Facilities Costs 1.6(c)
Additional Transponders 3.2(c)
Affiliate 1.4(b)
Agreement Preamble
Approved Companies 1.4(b)
Approved Participating Companies 1.4(b)
[*****************] 3.1
[*****************] 3.2(a)
Beam Preamble
Brazil Agreement Preamble
[*****************] 16.1(a)(i)
[*****************] 16.1(a)(ii)
[*****************] 16.1(g)
Confirmed Basis 5.3
Control 1.4(b)
[***] 16.1(a)(ii)
Customer Company 1.4(c)
Customer Preamble
Customer's DTH Service 1.4(b)
Customer's Offer 16.1(a)(v)
Customer-Provided Facilities 4.2
Decision Period 16.1(b)
[*****************] 3.2(c)
Deposit 3.1
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DTH Service 1.4(a)
[*****************] 16.1(c)(viii)
[**] 3.2(a)
[*****************] 1.6(c)
Extra Transponders 16.1(c)(iii)
[*****************] 3.2(a)
Founding Partner in Competition 1.8(d)
Founding Partners 1.4(b)
Globo Preamble
Xxxxxx Preamble
Indemnitee 9.6
Indemnitor 9.6
Initial Six Months 1.6(a)(i)
Intelsat 1.8(a)(iii)
Ku-band 1.4(a)
Ku-band units 7.4
Letter Agreement Preamble
Mexico Beam Preamble
Mexico Ku-band Transponders 16.1(a)(i)
Minimum Complement 2.1
Minimum Service Fee 1.6(a)
[*****************] 3.1
Multi-Country Agreement Preamble
Multi-Country Platform Preamble
Negotiation Period 16.1(f)
NetSat Preamble
News Preamble
Non-DTH Outlets 1.4(b)
Non-DTH Transponder 1.4(c)
Operational Requirements 4.1
Original Guarantors 17
PanAmSat Company 1.8(a)(i)
PanAmSat Group 9.3
PanAmSat Preamble
PAS-5 Preamble
PAS-5 Orbital Slot 1.8(D)
Payment Force Majeure 7.5A
[******************************************] 1.8(a)(i)(B)
[*****************] 1.4(a)
programming 1.4(a)
Protected Parties 5.3
[********] 3.2(b)
Satellite Preamble
[*****************] 3.2(c)
Service Date 2.1
Service Fee 3.1
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Service Preamble
Service Specifications 2.1
Service Term 2.1
Service Transponders Preamble
simultaneous 5.3
[*********************************************] 1.8(a)(i)(B)
Spare Equipment 5.3
[*****************] 16.1(g)
Taxes 3.5
TINTA 1.4(b)
Televisa Preamble
Term 2.1
Termination Payment(s) 7.5
Territory 1.4(a)
Transaction Costs 1.6(c)
transmissions 1.4(a)
Transponder Preamble
TWTAs 5.3
[*****************] 3.2(d)
Defined terms include plural or singular versions and derivatives therefrom
(e.g., "Control," "Controlling").
Each of the parties has duly executed and delivered this Agreement as
of the day and year first written above.
PANAMSAT INTERNATIONAL SYSTEMS, INC.
By:
Name:
Title:
CORPORACION DE RADIO Y TELEVISION
DEL NORTE DE MEXICO, S. A. DE C.V.
By:
Name:
Title:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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LIST OF APPENDICES
A. Service Transponders
B. Satellite Description and Spare Equipment
C. Service Specifications
D. Operational Requirements
E. Intentionally Deleted
F. Intentionally Deleted
G. Disclosure Schedule
H. Sample Calculations
I. Approved Companies
J. Sample Subordination Provision
K. Intentionally Deleted
L. Form of Guaranty
M. Form of Transmission Plan
