Exhibit 10.40
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
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TRANSPONDER LEASE AGREEMENT
FOR GALAXY VIII(i)
BETWEEN
XXXXXX COMMUNICATIONS GALAXY, INC.
AND
CALIFORNIA BROADCAST CENTER, LLC
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TABLE OF CONTENTS
1. The Satellite.........................................................1
1.01 Satellite....................................................1
1.02 Orbital Position.............................................1
1.03 Certain Transponder-Related Definitions......................1
1.04 Transponders Components and Certain Specifications...........2
2. Lease of Transponders; Lease Term.....................................2
2.01 Term.........................................................2
2.02 [***]........................................................2
2.03 Redelivery of Transponders...................................3
3. Lease Rate............................................................3
3.01 Lease Price Components Description...........................3
3.02 Monthly Base Lease Rate; TT&C Fee............................3
3.03 Place of Payment.............................................3
3.04 Deposit......................................................4
4. Conditions; Acceptance................................................4
4.01 Condition to Lessee's Right to Lease.........................4
4.02 Acceptance...................................................4
5. Representations and Warranties........................................4
5.01 Authority, No Breach.........................................4
5.02 Corporate Action.............................................4
5.03 Consents.....................................................4
5.04 Litigation...................................................5
5.05 No Broker....................................................5
6. Additional Representations, Warranties and Obligations of HCG.........5
6.01 Authorization Description....................................5
6.02 Transponder Performance Specifications.......................6
6.03 Right to Lease...............................................6
6.04 Government Regulations.......................................6
6.05 Not a Common Carrier.........................................6
6.06 TT&C.........................................................6
6.07 Outage Allowance.............................................6
6.08 [***]........................................................7
6.09 [***]........................................................7
6.10 [***]........................................................8
7. Additional Representations, Warranties and Obligations of Lessee......8
7.01 Compliance by Customers......................................8
7.02 Non-Interference.............................................8
7.03 Laws.........................................................9
7.04 Additional Usage Representations and Obligations.............9
[***] The Company has requested confidential treatment for certain information
identified in this exhibit
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8. Preemptive Rights.....................................................9
9. Transponder Spares....................................................9
9.01 Use of Transponder Spares....................................9
9.02 Simultaneous Failure -- Priority with Respect to the Use of
Transponder Spares..........................................10
9.03 HCG's Ownership of Transponders.............................10
10. Termination Rights...................................................10
10.01 Termination by Lessee.......................................10
10.02 Termination by HCG..........................................11
10.03 HCG's Right to Transfer.....................................11
10.04 Prompt Repayment............................................11
10.05 Termination by Lessee or HCG................................11
10.06 Right to Deny Access........................................12
11. Force Majeure........................................................14
11.01 Failure of Performance......................................14
12. Limitation of Liability/Breach of Warranty...........................14
12.01 Liability of HCG............................................14
12.02 Confirmed Failure...........................................14
12.03 Repayment for Failed Transponder............................14
12.04 Limitation of Liability.....................................15
12.05 Obligations of Lessee to Cooperate..........................16
13. Limitations on Transfer by Lessee....................................17
14. Utilization of Transponders for Services.............................17
15. Monthly Satellite Reports............................................17
15.01 Reports.....................................................17
15.02 Anomalous Operation Notification............................17
15.03 Maneuver Notification.......................................18
16. Confidentiality and Press Releases...................................18
16.01 Confidential Information....................................18
16.02 Notice Proceeding; Compelled Disclosure.....................18
16.03 Press Releases..............................................19
17. Disposition of Satellite.............................................19
18. Documents............................................................19
19. Conflicts............................................................19
20. Miscellaneous........................................................19
20.01 Interest....................................................19
20.02 Applicable Law and Entire Agreement.........................20
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20.03 Notices.....................................................20
20.04 Severability................................................21
20.05 Taxes.......................................................22
20.06 Successors..................................................22
20.07 Rules of Construction.......................................22
20.08 Survival of Representations and Warranties..................22
20.09 No Third-Party Beneficiaries................................22
20.10 Non-Waiver of Breach........................................23
20.11 Amendments..................................................23
20.12 Counterparts................................................23
Exhibit A Transponder Equipment
Exhibit B Transponder Performance Specifications
Exhibit C Transponder Priority List
Exhibit D Payment Schedule
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GALAXY VIII(i) TRANSPONDER LEASE AGREEMENT
THIS GALAXY VIII(i) TRANSPONDER LEASE AGREEMENT (as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms set forth herein, this "Agreement") is made and entered into as of
April 21, 1997, by and between XXXXXX COMMUNICATIONS GALAXY, INC., a California
corporation ("HCG"), and CALIFORNIA BROADCAST CENTER, LLC, a Delaware limited
liability company ("Lessee").
RECITALS
A. HCG plans to construct a communications satellite, model HS-601 HP,
known as Galaxy VIII(i), carrying a payload of thirty-two (32) Ku-Band
transponders, as more specifically described in Section 1.04 (the
"Transponders"), and certain redundant equipment.
B. Subject to the approval of the Federal Communications Commission (the
"FCC"), HCG intends to have the satellite known as Galaxy VIII(i)
launched during the fourth quarter of 1997 and to cause such satellite
to be co-located in the 95(Degree) West Longitude orbital location
along with the satellite known as Galaxy III-R.
C. The Transponders are capable of providing signals to Mexico,
Central America, South America and the Caribbean (collectively, the
"Territory").
D. Lessee desires to lease from HCG and HCG desires to lease to Lessee
the Transponders upon the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the mutual promises set forth below and other
valuable consideration the receipt and adequacy of which are hereby
acknowledged, HCG and Lessee hereby mutually agree as follows:
1. The Satellite
1.01 Satellite. Subject to the approval of the FCC, HCG plans to
construct and launch the satellite which is referred to hereinafter as "Galaxy
VIII(i)" or the "Satellite."
1.02 Orbital Position. Subject to the approval of the FCC, the
orbital position of Galaxy VIII(i) will be 95(Degree) West Longitude.
1.03 Certain Transponder-Related Definitions. As used in this
Agreement, (i) "Owner' shall include the actual owner of a Transponder,
including HCG if there remain any unsold Transponders, or any permitted assignee
of such owner's Transponder, or any lessee or licensee of HCG's (including,
without limitation, Lessee) entity to which HCG (or any affiliate of HCG)
provides service using the Transponders; (ii) the term "purchase" shall
include the execution of an agreement with HCG for a lease of Transponders for a
term equal to at least 75% of the Satellite's Useful Commercial Life (as Defined
in Section 2.01 below); and (iii) "affiliate" shall mean, with respect to any
entity, any corporation or other entity controlling or controlled by or under
common control with such entity.
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1.04 Transponders Components and Certain Specifications. Exhibit A
to this Agreement sets forth the specific equipment that comprises the
Transponders. Exhibit B to this Agreement sets forth the "Transponder
Performance Specifications," which are certain technical specifications for the
Transponders, including values for each Transponder for polarization isolation,
interference between Transponders, frequency response, group delay, amplitude
non-linearity, spurious outputs, phase shift, cross talk, stability, transmit
EIRP, uplink saturation flux density, and G/T. HCG shall make copies of the
antenna range gain contour test data available to Lessee promptly after the
tests related thereto are completed.
2. Lease of Transponders; Lease Term
2.01 Term. Unless otherwise terminated earlier in accordance with
this Agreement, including, without limitation, pursuant to Sections 5.03, 6.01,
10 or 17, this Agreement shall be for the following term (the "Term"):
(a) on and as of the Delivery (as defined in Section 4.02) of
Galaxy VIII(i) (the "Galaxy VIII(i) Lease Commencement Date"), HCG
shall lease to Lessee, and Lessee shall lease from HCG, all of the
Transponders (each Transponder then being leased to Lessee is a "Lessee
Transponder" and, collectively, such Transponders are the "Lessee's
Transponders") for the period (the "Base Term") commencing as set forth
above and terminating immediately after 74.0% of the Satellite's
anticipated Useful Commercial Life has expired. "Useful Commercial
Life" means the Satellite's estimated useful economic life as of the
date on which the Satellite is ready to be placed in service as
indicated by the acceptance test plan more fully is described in
Section 4.02, as determined by HCG in its reasonable discretion.
(b) provided that Lessee has performed all of its obligations
hereunder, Lessee may, at its option, not less than 540 days prior to
the anticipated expiration of the Base Term, give HCG notice (the
"Renewal Notice") of Lessee's irrevocable intention to renew this
Agreement in respect of all, but not less than all, of the Transponders
for a period commencing upon the expiration of the Base Term and
extending through the last day of the Useful Commercial Life of the
Satellite (the "Renewal Term"). If Lessee shall fail timely to deliver
the Renewal Notice, then Lessee shall be deemed to have elected not to
renew this Agreement. Galaxy Latin America, LLC, a Delaware limited
liability company ("GLA"), shall be deemed to be an intended third
party beneficiary of this Section 2.01(b).
2.02 [***]
(a) HCG agrees that if (i) HCG terminates this Agreement
pursuant to Sections 10.02 or 10.05 hereof, desires to Transfer the
Transponders to a third party or accelerates remaining payments
pursuant to Section 10.02 due to Lessee's breach or default of the
terms hereof; and (ii) [***].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(b) Nothing in this Section 2.02, [***], shall prevent HCG and
Lessee from modifying or amending this Agreement at any time or in any
manner (an "Amendment"); provided, however, that (i) [***]; and (ii)
[***].
2.03 Redelivery of Transponders. Subject to Section 2.02, upon the
expiration, termination, or cancellation of this Agreement as to any Lessee
Transponder for any reason whatsoever (including, without limitation, expiration
of this Agreement in accordance with its terms or cancellation of this Agreement
by HCG as a result of a breach by Lessee), such Lessee Transponder shall be
deemed, without any further action by any party, to be redelivered to HCG and
HCG shall be entitled to immediate possession thereof. HCG shall thereafter have
the right to utilize such redelivered Transponder in any manner it determines.
3. Lease Rate
3.01 Lease Price Components Description. The monthly lease rate for
Lessee's Transponders shall be the "Monthly Base Lease Rate" set forth in
Section 3.02. In addition, Lessee shall pay to HCG a fee (the "TT&C Fee") for
the tracking, telemetry and control services described in Section 6.06.
3.02 Monthly Base Lease Rate; TT&C Fee. During the Base Term, the
Monthly Base Lease Rate for Lessee's Transponders shall be [***] per month and,
subject to the following proviso, shall be due and payable in advance on (i) the
later of the Galaxy VIII(i) Lease Commencement Date or January 1, 1998, and (ii)
the first day of each month thereafter through the last day of the Base Term;
provided, however, that the Monthly Base Lease Rate payments shall be made in
accordance with Exhibit D to this Agreement, [***]; provided further, however,
if this Agreement is terminated, Lessee shall, within ten (10) days after the
termination of this Agreement, pay to HCG the applicable amount set forth in
[***] of Exhibit D, less the amount of any deposit paid to HCG pursuant to
Section 3.04. During the Renewal Term, if any, the Monthly Base Lease Rate for
Lessee's Transponders shall be [***] for such Transponders and shall be due and
payable in advance on the first day of the Renewal Term and the first day of
each month thereafter through the last day of the Term. If one of Lessee's
Transponders becomes a Failed Transponder (as defined in Section 12.01),
Lessee's rights and obligations to continue making Monthly Base Lease Rate
payments with respect to such Failed Transponder shall be governed by Sections
12.01 and 12.03. Payments for any partial month shall be pro-rated. "[***]"
means [***]. The TT&C Fee shall initially be [***] per month and the TT&C Fee
for each subsequent year shall be adjusted at a rate equal to [***].
3.03 Place of Payment. All payments by Lessee (i) shall be made in
immediately available funds to HCG at its principal place of business, as
designated in Section 20.03, or by wire transfer to the account of HCG
designated by HCG pursuant to written notice given as set forth in Section 20.03
and
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ii) shall be deemed to be made only upon actual receipt by HCG. Any refunds by
HCG (a) shall be made in immediately available funds to Lessee at its principal
place of business as designated in Section 20.03, or by wire transfer to the
account of Lessee designated by Lessee pursuant to written notice given as set
forth in Section 20.03 and (b) and shall be deemed to be made only upon actual
receipt by Lessee.
3.04 Deposit. Lessee shall pay to HCG a deposit in the amount of
[***] in immediately available funds on or before [***]. Except as set forth in
Sections 6 and 10 hereof, such deposit is non-refundable and Lessee shall not be
entitled to interest on any portion thereof. HCG shall apply such deposit in
partial or in full satisfaction (as the case may be) of Lessee's Monthly Base
Lease Rate payments for the last [***] of the Base Term (if Lessee fails to
timely give a Renewal Notice), the Renewal Term, or as required to meet any
delinquent Monthly Base Lease Rate payments, as determined by HCG in its sole
discretion.
4. Conditions; Acceptance
4.01 Condition to Lessee's Right to Lease. A condition to HCG's
obligation to lease Lessee's Transponders to Lessee, and of Lessee's right to
lease Lessee's Transponder from HCG, shall be Lessee's timely payment, on or
before the Galaxy VIII(i) Lease Commencement Date, of the Monthly Base Lease
Rate and the TT&C Fee for the first month hereof and the deposit referred to in
Section 3.04.
4.02 Acceptance. HCG will test each of Lessee's Transponders in
accordance with the acceptance test plan prepared by HCG prior to the launch of
Galaxy VIII(i), a copy of which shall be provided to Lessee. Lessee agrees that
if such tests indicate that Lessee's Transponders (i) have passed all tests set
forth in the aforementioned acceptance test plan, (ii) meet the Transponder
Performance Specifications and (iii) are available for service, then acceptance
and Delivery of Lessee's Transponders by Lessee shall be deemed to occur on the
later of HCG's delivery to Lessee of the results of the acceptance test plan and
the date on which HCG makes the Transponders available to Lessee for Lessee's
commercial use. HCG shall keep Lessee reasonably informed of the expected date
of such delivery. To the extent any Transponders are not deemed accepted, the
amounts of the Monthly Base Lease Rate payments will be proportionately reduced
(based on the assumption that all of the Transponders have equal value) and
Lessee's Transponders shall be deemed to be comprised of only the accepted
Transponders.
5. Representations and Warranties
HCG and Lessee each, except as expressly indicated herein, represent
and warrant to, and agree with, the other that:
5.01 Authority, No Breach. It has the corporate or other
organizational right, power and authority to enter into, and perform its
obligations under, this Agreement. The execution, delivery and performance of
this Agreement will not result in the breach or non-performance of any
agreements it has with third parties.
5.02 Corporate Action. It has taken all requisite corporate or other
organizational action necessary to approve execution, delivery and performance
of this Agreement, and this Agreement constitutes a legally valid and binding
obligation upon itself in accordance with its terms.
5.03 Consents. The fulfillment of its obligations hereunder will not
constitute a material violation of any existing applicable law, rule, regulation
or order of any governmental authority. Except
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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as set forth in Section 6.01, all material necessary or appropriate public or
private consents, permissions, agreements, licenses, or authorizations to which
it or any Transponder or, in the case of HCG, the Satellite may be subject have
been or shall be obtained in a timely manner; provided, however, that it shall
be HCG's sole responsibility to obtain any regulatory approvals needed to enable
it to lease Transponders as provided for in this Agreement, other than the
regulatory approvals described in Section 6.01(b) below. Notwithstanding the
preceding sentence, HCG and Lessee acknowledge that the transactions set forth
in this Agreement may be challenged before the FCC or a court of competent
jurisdiction by other persons or entities not parties hereto. In such event, HCG
and Lessee agree that HCG shall use its best efforts, and, at the reasonable
request of HCG, Lessee shall use reasonable efforts, before the FCC, and the
courts if an appeal from an FCC order is taken, to support HCG's right to lease
and Lessee's right to lease the Transponders and that they shall fully cooperate
with each other in these endeavors. Lessee alone shall have the right to
determine whether and to whom it will incur legal expenses in connection with
any proceeding arising out of its obligations under this Section 5.03. If,
however, by written order, the FCC or a court of competent jurisdiction shall
determine that HCG may not lease to Lessee and Lessee may not lease from HCG the
Transponders on the terms and conditions set forth herein, then HCG and Lessee
shall seek immediate review of such order before the FCC or an appellate court
or shall, if possible, reconstitute the transaction to comply with such order.
If an appellate court issues a written order, which is no longer subject to
further judicial rehearing or review, upholding the determination of the FCC or
a court or competent jurisdiction that HCG may not lease and Lessee may not
lease the Transponders, then HCG and Lessee shall, if possible, reconstitute the
transaction as set out herein and, if they are unable to do so, either party
shall thereafter have the right to terminate this Agreement (upon written notice
to the other party) as set forth in Section 10.05, without liability to the
other, except for obligations arising prior to the date thereof.
5.04 Litigation. There is no outstanding, or to the best of its
knowledge, threatened, judgment, pending litigation or proceeding, involving
or affecting the transactions provided for in this Agreement.
5.05 No Broker. It does not know of any broker, finder or
intermediary involved in connection with the negotiations and discussions
incident to the execution of this Agreement, or of any broker, finder or
intermediary who might be entitled to a fee or commission upon the consummation
of the transactions contemplated by this Agreement.
6. Additional Representations, Warranties and Obligations of HCG
6.01 Authorization Description.
(a) HCG has filed with the FCC an application, and will
promptly file any necessary amendments to such application (collectively, the
"Application") to construct, launch and operate the Satellite at the 95(Degree)
West Longitude orbital location and to permit the Transponders to be used to
provide fixed satellite services to the Territory.
(b) Certain authorizations from governmental bodies outside the
United States have not yet been obtained and will need to be obtained from such
governmental bodies prior to the provision of service utilizing the Transponders
to locations outside the United States and prior to uplinking to the
Transponders from locations outside of the United States.
(c) If the FCC fails to approve the Application within [***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[***], then this Agreement shall terminate at the election of either party (upon
written notice to the other party) and (i) HCG shall have no liability to
Lessee, except for prepaid charges made by Lessee (if any); and (ii) Lessee
shall have no liability to HCG, except for previously incurred obligations.
6.02 Transponder Performance Specifications. Lessee's Transponders,
upon Delivery, shall at least meet the Transponder Performance Specifications.
6.03 Right to Lease. On the Galaxy VIII(i) Lease Commencement Date
and subject to Section 4.01, Lessee shall be entitled to lease each of Lessee's
Transponders free from all liens, charges, claims or encumbrances (collectively,
"Encumbrances"), except: (i) Encumbrances resulting from (a) Lessee's lease of
Lessee's Transponders; (b) any actions taken by Lessee; or (c) the right and
interest of any financing entity pursuant to any transactions entered into in
connection with a sale and leaseback transaction involving the Satellite; and
(ii) Encumbrances which do not have an adverse effect on Lessee's rights
hereunder. Notwithstanding the preceding sentence, for so long as this Agreement
is in full force and effect and for so long as Lessee is not in default under
this Agreement, HCG shall not assign (including as security) or otherwise grant
any ownership interest in any Transponders then being leased by Lessee pursuant
to this Agreement without securing the agreement of the party granted such an
interest (the "Holder") that, (y) provided Lessee is not in default under this
Agreement, Lessee shall lawfully and quietly hold and enjoy the benefits of this
Agreement without hindrance or molestation from HCG, Holder or any person
claiming through or under HCG or Holder, and (z) Holder shall not interfere with
Lessee's use of any of Lessee's Transponders in accordance with this Agreement
notwithstanding any default by HCG under its agreement with Holder providing for
such an interest. The parties agree that GLA is an intended third party
beneficiary of this Section 6.03.
6.04 Government Regulations. HCG has used, and until disposition of
the Satellite pursuant to Section 17 will continue to use, its reasonable best
efforts to obtain and maintain, in all material respects, all applicable United
States federal, state and municipal and other third party authorizations or
permissions to operate the Satellite, applicable to it and the Satellite, and to
comply, in all material respects, with all such regulations regarding the
operation of the Satellite and Transponders applicable to it.
6.05 Not a Common Carrier. Unless required to do so by the FCC, HCG
shall not hold itself out, publicly or privately, as a provider of common
carrier communications services on the Satellite and is not purporting herein to
provide to Lessee or to any other party any such services with respect to Galaxy
VIII(i).
6.06 TT&C. Tracking, telemetry and control shall be provided by
Xxxxxx Communications Satellite Services, Inc. ("HCSS"), an affiliate of HCG,
for the Term pursuant to a separate "Transponder Service Agreement" which has
been executed by HCSS and Lessee concurrently herewith. The services provided by
HCSS pursuant to the Transponder Service Agreement are more specifically
described in such Transponder Service Agreement. The TT&C Fee for the Satellite
shall be as set forth in Section 3.01 hereof.
6.07 Outage Allowance. HCG shall grant Lessee an Outage Allowance
as follows:
If an "Outage Allowance Failure Period" (as defined below) occurs, then
for each hour of such Outage Allowance Failure Period HCG shall grant Lessee a
pro rata Outage Allowance based upon the monthly charge for the Lessee's
Transponder experiencing the Transponder capacity failure, the length
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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of the Outage Allowance Failure Period, and a standard of 720 hours per month,
calculated pursuant to the equation below. Any such Outage Allowance shall be
applied to the next succeeding monthly billing to Lessee and shall not in any
case exceed one month's standard billing. "Outage Allowance Failure Period"
shall mean the aggregate period--only where such aggregation exceeds one (1)
hour during any consecutive thirty (30) day period on such Transponder--during
which a Transponder capacity failure(s) occurs. A Transponder capacity failure
shall be measured from the time HCG receives notice from Lessee of a claimed
Transponder capacity failure until the time the Transponder has been restored to
operation, but shall not begin in any event until Lessee ceases to use such
Transponder. HCG shall accept or reject such outage claim within twenty-four
(24) hours of notice from Lessee, or else such claim will be deemed accepted.
Outage Allowance = Outage Allowance Failure (in Hours) x N
________________________________________
720
where N = the Monthly Base Lease Rate then in effect divided by the number of
Transponders in operation immediately prior to such Outage Allowance
Failure Period.
In no case shall an Outage Allowance be made for any Transponder capacity
failure caused primarily by: (i) any failure on the part of Lessee to perform
its transmission or other material or operational obligations pursuant to this
Agreement; (ii) failure of any facilities provided by Lessee; (iii) reasonable
periodic maintenance; provided, however, that HCG will inform Lessee of any
proposed periodic maintenance in advance and will use best reasonable efforts to
agree upon the times at which such periodic maintenance will be performed on
Lessee's Transponders; (iv) interference from sun outage or from third party
transmissions or usage; (v) cooperative testing, except where trouble or fault
is found in the Lessee's Transponder; or (vi) any other act or failure to act by
Lessee.
6.08 [***]. If there is a [***] during the Term [***]. If Lessee [***].
6.09 [***]. If Lessee has elected to extend the term of this
Agreement through the Renewal Term pursuant to Section 2.01(b), then [***]. If
Lessee[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[***] in this Agreement, then HCG shall [***]. [***] shall specify that [***]
shall be equal to [***]. "[***]" means (a) [***] or (b) [***]. Notwithstanding
anything to the contrary contained herein, [***].
6.10 [***]. HCG agrees that, [***]. HCG further agrees that so long
as this provision is in force and effect, each lease or agreement for
transponder capacity [***], and upon receipt of written notice from Lessee that
[***].
7. Additional Representations, Warranties and Obligations of Lessee
7.01 Compliance by Customers. Lessee shall not allow any of its
customers or any other third party to utilize, directly or indirectly, any of
the Lessee's Transponders in a manner that would constitute a breach of the
terms of this Agreement had such use been by Lessee on its own behalf.
7.02 Non-Interference. Lessee's radio transmissions (and those of
its uplinking agents) to the Satellite shall comply in all material respects
with all FCC and all other governmental (whether international, federal, state,
municipal, of a Territory Country (as defined in Section 7.04) or otherwise)
statutes, laws, rules, regulations, ordinances, codes, directives and orders, of
any such governmental agency, body, or court (collectively, "Laws") applicable
to it regarding the operation of the Satellite and Lessee's Transponders. Lessee
shall not utilize (or permit or allow any of its uplinking agents to utilize)
any of Lessee's Transponders in a manner that will or may interfere with the use
of any other Transponder or cause physical harm to any Transponder, or to the
Satellite. Further, Lessee will coordinate (and will require its uplinking
agents to coordinate) with HCG, in accordance with procedures reasonably
established by HCG and uniformly applied to all users of transponders on the
Satellite, its transmissions to the Satellite, so as to minimize adjacent
channel and adjacent satellite interference. For purposes of this Section 7.02,
interference shall also mean acts or omissions which cause a Transponder to fail
to meet its Transponder Performance Specifications. Without limiting the
generality of the foregoing, Lessee (and its uplinking agents) shall comply with
all FCC rules and regulations regarding use of automatic transmitter
identification systems (ATIS).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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7.03 Laws. Lessee shall comply (and shall require its uplinking
agents to comply), in all material respects, with all Laws applicable to it
regarding the operation or use of the Satellite and Lessee's Transponders.
7.04 Additional Usage Representations and Obligations
(a) Lessee has not been convicted for the criminal violation
of, and has not been found by the FCC or other federal, state or local
governmental authority in the United States or by a Territory Country
(as defined below) with appropriate jurisdiction (a "Governmental
Authority") to have violated, any law or regulation concerning illegal
or obscene program material or the transmission thereof (the
"Obscenity/Content Laws"), and Lessee is not aware of any pending
investigation (including, without limitation, a grand jury
investigation) involving Lessee's programming related to the
Obscenity/Content Laws or any pending proceeding against Lessee for the
violation of any Obscenity/Content Laws. As used herein, "Territory
Country" shall mean any country located in the Territory.
(b) Lessee will notify HCG as soon as it receives notification
of, or becomes aware of, any pending investigation by any Governmental
Authority, or any pending criminal proceeding against Lessee, which
investigation or proceeding concerns transmissions by Lessee over the
Transponders potentially in violation of any law, including without
limitation, Obscenity/Content Laws.
(c) Any use of Lessee's Transponders shall comply, in all
material respects, with all applicable laws of the United States and
each Territory Country regarding the operation or use of the Satellite
and Lessee's Transponders (including, but not limited to, any
Obscenity/Content Laws).
8. Preemptive Rights
Lessee recognizes that it may be necessary in unusual or abnormal
situations or conditions for HCG deliberately to preempt or interrupt Lessee's
use of its Transponders, in order to protect the overall performance of the
Satellite. Such decisions shall be made by HCG in its sole discretion; provided,
however, that, to the extent it is technically feasible, HCG shall preempt or
interrupt the use of Transponders in the inverse order of their priority as set
forth in Exhibit C hereto. To the extent technically feasible, HCG shall give
Lessee at least forty-eight (48) hours' notice of such preemption or
interruption and HCG shall use its reasonable best efforts to schedule and
conduct its activities during periods of such preemption or interruption so as
to minimize the disruption to the use of Transponders on such Satellite. To the
extent that such preemption results in a loss to Lessee of the use of Lessee's
Transponders sufficient to constitute a breach of HCG's obligations as set forth
in Section 12, Lessee shall have all of the rights and remedies set forth in
Sections 9 and 12.
9. Transponder Spares
9.01 Use of Transponder Spares. The Satellite contains certain
Ku-Band redundant equipment units (individually, a "Transponder Spare"), which
are designed as substitutes for equipment units the failure of which could cause
a Transponder to fail to meet the Transponder Performance Specifications. HCG,
as soon as possible and to the extent technically feasible, shall employ a
Transponder Spare in the Satellite as a substitute for Lessee's Transponder
equipment unit that has caused any Lessee Transponder to suffer a Confirmed
Failure (as defined in Section 12.02) in order to enable such Lessee Transponder
9
to meet the Transponder Performance Specifications. To the extent technically
feasible, a Transponder Spare will be substituted for the faulty equipment unit
on a first-needed, first-served basis to satisfy HCG's obligations to Lessee and
to other Owners or users of Transponders on the Satellite, if any, which have
suffered Confirmed Failures; provided, however, that HCG's obligations to
provide Transponder Spares shall continue until such time as all of the
Transponder Spares are committed to use as substitutes for Transponders which
have suffered Confirmed Failures. If HCG furnishes a Transponder Spare to Lessee
as a substitute for an equipment unit that has caused Lessee's Transponder to
suffer a Confirmed Failure, then such Transponder Spare shall become part of the
Transponder which is leased to Lessee hereunder, and Lessee, concurrently, shall
no longer have any right to lease or otherwise use the failed equipment unit.
Lessee's Transponder equipment unit which has been returned shall be made
available by HCG, to the extent technically feasible, to satisfy its obligations
to any other Owners of Transponders on the Satellite. HCG also shall have the
right, until the Transponder Spares are needed, to utilize such Transponder
Spares in any manner HCG determines.
9.02 Simultaneous Failure -- Priority with Respect to the Use of
Transponder Spares. If Transponders of more than one Owner simultaneously suffer
a Confirmed Failure, then the Owner of the Transponder with the highest priority
as set forth on Exhibit C, shall have priority as to the use of Transponder
Spares (provided, however, that Lessee shall have the right at any time from
time to time, by written notice to HCG, to change the priorities between and
among any of Lessee's Transponders), to the extent technically feasible. As used
in this Section 9.02, the term "simultaneously" shall be deemed to mean
occurring within any 24-hour period.
9.03 HCG's Ownership of Transponders. HCG may retain or acquire
ownership of any Transponders (any Transponders so retained or acquired by HCG
being referred to herein as "HCG's Transponders"). In such event, HCG shall have
the same right to use HCG's Transponders as any other Owner (taking into account
such Owner's rights as set forth in the relevant transponder purchase agreement,
lease agreement or license agreement) would have, including, without limitation,
the right to utilize Transponder Spares in the event HCG's Transponders do not
meet the Transponder Performance Specifications. HCG also shall have the right,
but not the obligation, to utilize HCG's Transponders to satisfy HCG's
obligations (i) to Lessee under this Agreement, or (ii) to any other Owners.
HCG's priority under the provisions of this Section 9 and other sections of this
Agreement shall be determined in accordance with Exhibit C.
10. Termination Rights
10.01 Termination by Lessee. Provided that Lessee is not in default
of any of its material obligations under the Agreement, Lessee shall have the
right to terminate its obligations under this Agreement upon delivery of written
notice to HCG at least thirty (30) days' prior to the effective date of such
termination, only if and when any of the following events shall have occurred:
(a) If, prior to the last day of the Term, seventeen (17) or
more of Lessee's Transponders on Galaxy VIII(i) become Failed
Transponders (as defined in Section 12.01); provided that such failure
does not result from a force majeure condition (as set forth in Section
11.01, unless such force majeure condition continues for longer than
one (1) month and during such period all of such Lessee's Transponders
remain Failed Transponders); and
(b) If Lessee terminates its obligations as to Lessee's
Transponders as set forth in this Section 10.01 (the "Terminated
Transponders"), then Lessee shall be entitled to a full refund, without
interest, of all lease prepayments made, if any, for each such
Terminated Transponder,
10
less any payments made by HCG to it on account of such Terminated
Transponders pursuant to other provisions of this Agreement, and Lessee
and HCG shall have no further obligations to each other as to each such
Terminated Transponder, except for (i) obligations arising with respect
to such Terminated Transponder prior to its becoming a Failed
Transponder, and (ii) Lessee's obligation to pay [***] for all periods
prior to such termination.
10.02 Termination by HCG. Notwithstanding anything else set forth in
this Agreement and in addition to all other remedies HCG may have, HCG may
immediately terminate this Agreement and accelerate all remaining payments due
through the end of the Term if Lessee shall have failed to pay any amount due
and payable pursuant to the provisions of Section 3, and Lessee has been given
written notice by HCG of said failure (and the Chief Financial Officer and
General Counsel of GLA have been given a copy of such notice) and Lessee shall
have failed to pay the amount due and payable (and GLA has not assumed and
performed all of Lessee's obligations pursuant to a GLA Assumption as set forth
in Section 2.02 hereunder) within ten (10) business days after HCG has given
such notice to Lessee. Any late payments by Lessee to HCG shall be with interest
calculated at the rate set forth in Section 20.01, payable with the amount due
and calculated from the date payment was due until the date it is received by
HCG. HCG shall have the obligation to mitigate its damages in connection with
any breach by Lessee of this Agreement only to the extent mandated by the
internal laws of the State of California. As an indication only and not as a
limitation, HCG shall not have any obligation to remarket Lessee's Transponders
prior to leasing or selling all transponders on satellites either launched or
expected to be launched by HCG or any of its affiliates.
10.03 HCG's Right to Transfer. If, for any reason whatsoever, Lessee
does not make the payments in the amounts and on the dates set forth in Section
3 and Lessee and GLA fail to cure such default as set forth in Section 10.02,
then, in addition to all of its other remedies at law or in equity, HCG shall be
entitled immediately to Transfer (as defined in Section 13) Lessee's
Transponders to whomever HCG sees fit, Lessee shall not be entitled to any
equitable relief as a result thereof, and Lessee's exclusive remedy shall be
limited to recovery of any payments made to it by HCG, without interest, less
any claim HCG has against Lessee by reason of Lessee's default.
10.04 Prompt Repayment. All refunds provided for in this Section 10
to be made by HCG shall be made within fifteen (15) business days of receipt by
HCG of notice of termination by Lessee, and any late payment by HCG to Lessee
shall be with interest calculated at the rate set forth in Section 20.01,
payable with the amount due and calculated from the date payment was due until
the date it is received by Lessee.
10.05 Termination by Lessee or HCG. Notwithstanding anything else set
forth in this Agreement, either Lessee or HCG may terminate its obligations
under this Agreement as to the Lessee's Transponders, upon written notice to the
other party: (i) if the FCC shall have by Final Order (as defined below),
prevented HCG from using the Satellite or the Transponders to transmit to the
Territory; (ii) on the Satellite Removal Date (as defined in Section 17); or
(iii) as provided under the provisions of Section 5.03. As used herein, an order
of the FCC becomes a "Final Order" when the FCC's action is no longer subject to
administrative or judicial reconsideration, rehearing, review, stay, appeal or
other similar actions which could be filed with the FCC or with any court having
jurisdiction to review said action.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
11
10.06 Right to Deny Access.
(a) If, in connection with using Lessee's Transponders,
(i) User (as defined below) is indicted or is
otherwise charged as a defendant in a criminal proceeding based
upon, or is convicted under, any Obscenity/Content Law or has
been found by any Governmental Authority to have violated any
such law;
(ii) based on any User's use of the Transponders, HCG
is indicted or otherwise charged as a criminal defendant,
becomes the subject of a criminal proceeding or a governmental
action seeking a fine, license revocation or other sanctions,
or any Governmental Authority seeks a cease and desist or other
similar order or filing;
(iii) the FCC has issued an order initiating a
proceeding to revoke HCG's authorization to operate the
Satellite;
(iv) HCG obtains a court order pursuant to Section
10.06(c) or a court or Governmental Authority of competent
jurisdiction orders HCG to deny access to User or orders User
to cease transmission; or
(v) HCG receives written notice (the "Illegal
Programming Notice") from a Governmental Authority that such
authority considers Lessee and/or any other User's programming
to be in violation of Obscenity/Content Laws (the "Illegal
Programming"), and that if HCG does not cease transmitting such
Illegal Programming, then HCG and/or its affiliates and/or any
of their executives will be indicted or otherwise charged as a
criminal defendant, will become the subject of a criminal
proceeding or a governmental action seeking a fine, license
revocation or other sanctions, or that such Governmental
Authority will seek a cease and desist or other similar order
or filing (with HCG being obligated, to the extent permitted by
law, to provide Lessee with a copy of such Illegal Programming
Notice);
then, upon notice from HCG to Lessee (the "Denial of Access Notice"),
User shall cease using Lessee's Transponders immediately, in the case
of a denial of access pursuant to subparagraphs (i), (ii), (iii) or
(iv) above, or within 24 hours following receipt of such notice, in the
case of a denial of access pursuant to subparagraph (v), above; and if
User does not voluntarily cease using such capacity at the appropriate
time, then HCG shall have the right to take such steps as HCG deems
necessary to prevent User from accessing Lessee's Transponders.
Provided, however, that if User has more than one programming service,
then the denial of access by HCG shall apply only to the Transponders
used to provide the Illegal Programming service; and provided further,
however, that if, upon receipt of the Denial of Access Notice from HCG,
User does not immediately cease transmission of such Illegal
Programming service, then HCG shall have the right to take such steps
as HCG deems necessary to prevent User from accessing the Transponders
used to transmit such Illegal Programming service (and if, thereafter,
Lessee transmits such Illegal Programming service using any of Lessee's
Transponders, then HCG shall have the immediate right, without further
notification, to take such steps as HCG deems necessary to prevent
Lessee from accessing any Lessee's Transponder). As used herein, "User"
shall mean Lessee and any person to whom Lessee Transfers all or part
of its right to use any of Lessee's Transponders, including without
limitation, a lessee, licensee or assignee. Lessee agrees to
12
maintain a properly operating facsimile machine at all times to
receive the Denial of Access Notice from HCG.
(b) If HCG denies, or has given Lessee notice of its intent to
deny, access to Lessee's Transponders pursuant to the provisions of
this Section 10.06, and if Lessee does not believe the conditions set
forth in this Agreement to HCG's denial of access have been met, then
Lessee shall have the immediate right to seek injunctive relief,
including a temporary restraining order on notice of four (4) hours or
more to HCG, to prevent the denial or continuing denial of such access
by HCG.
(c) HCG shall also have the right to seek: (i) injunctive
relief, including a temporary restraining order on notice of four (4)
hours or more to Lessee, to prevent, suspend or otherwise limit User's
continued access to Lessee's Transponders where HCG believes such use
has resulted or will result in a violation of any Obscenity/Content
Law; or (ii) declaratory relief to establish its right to deny User's
access to Lessee's Transponders under this Agreement.
(d) Either party shall be entitled to oppose the other's
attempt to obtain equitable relief. However, in order to enable either
party to obtain a resolution of any such dispute as expeditiously as
possible, both parties hereby agree that: (i) neither party will
contest the jurisdiction of, or the venue of, any action for equitable
relief brought by the other party in the following courts: the U.S.
District Court for the Southern District of New York and the U.S.
District Court for the Central District of California; (ii) the party
opposing equitable relief (the "Opposing Party") will make itself
available to accept service by telecopy or personal delivery on a 24
hour-a-day basis for five (5) consecutive days following receipt by the
Opposing Party of the other party's notice of its intent to seek such
equitable relief; and (iii) if either party seeks a temporary
restraining order and provides notice to the Opposing Party at least
four (4) hours before the scheduled court hearing, then the Opposing
Party will not challenge the timeliness of such notice.
(e) If it is determined by final judicial order that HCG
prevented Lessee from accessing any or all of Lessee's Transponders at
a time when it did not have the right to do so pursuant to this Section
10.06, then Lessee's sole and exclusive remedy shall be HCG's payment
to Lessee of liquidated damages equal to [***], for the terminated
capacity, such pro-ration to be based on the period of time of loss of
use of such capacity and the amount of capacity affected.
(f) All remedies of HCG set forth in this Section 10.06 shall
be cumulative and in addition to, and not in lieu of, any other
remedies available to HCG at law, in equity or otherwise, and may be
enforced by HCG concurrently or from time to time.
(g) In addition to any other indemnification obligations found
elsewhere in this Agreement, Lessee shall indemnify and save HCG, its
directors, officers, employees, and its affiliates from any liability
or expense arising out of or related to User's use of Lessee's
Transponders in violation (or alleged violation) of this Section 10.06.
Lessee shall pay all expenses (including reasonable attorneys' fees)
incurred by HCG in connection with all legal or other formal or
informal proceedings, instituted by any private third party or any
Governmental Authority, and arising out of or related to User's use of
Lessee's Transponders under this Section 10.06, and Lessee shall
satisfy all judgments, fines, penalties, costs, or other awards which
may
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
13
be incurred by or rendered against HCG as a result thereof, as and
to the extent permitted by law.
11. Force Majeure
11.01 Failure of Performance. Any failure in the performance of the
Transponders, once provided, shall not be a breach of this Agreement if such
failure results from acts of God, governmental action or Law (whether in its
sovereign or contractual capacity) or any other circumstances reasonably beyond
the control of HCG, including, but not limited to, earth station sun outage,
weather, or acts or omissions of Lessee or any third parties (excluding Xxxxxx
Telecommunications & Space Company ("HTSC") and all of its direct and indirect
subsidiaries, and any other affiliates of HCG or HTSC with whom HCG or HTSC
contracts for any components of the Satellite or any services with respect
thereto). Nothing in this Section 11.01 shall excuse HCG's obligations to
provide Transponder Spares, to the extent available and technically feasible, to
satisfy its obligations as set forth in Section 9.
12. Limitation of Liability/Breach of Warranty
12.01 Liability of HCG. If (i) after the Galaxy VIII(i) Lease
Commencement Date, a Lessee Transponder fails to meet the Transponder
Performance Specifications prior to the last day of the Term, (ii) such failure
is deemed to be a Confirmed Failure, and (iii) HCG is unable to furnish the
necessary Transponder Spare as a substitute for the Lessee Transponder pursuant
to Section 9, then such Transponder shall be deemed to be a "Failed
Transponder," then, notwithstanding the fact that such failure of the Lessee's
Transponder is excused by an event set forth in Section 11.01, Lessee shall be
entitled to cease making the Monthly Base Lease Rate payments as to such Failed
Transponder for so long as the event set forth in Section 11.01 continues.
12.02 Confirmed Failure. A Lessee Transponder shall be deemed to have
suffered a "Confirmed Failure" if (a) it fails to meet the Transponder
Performance Specifications for a cumulative period of more than [***] during any
consecutive [***] period, (b) [***] or more "outage units" (as defined below)
occur within a consecutive [***] period, or (c) it fails to meet the Transponder
Performance Specifications for any period of time under circumstances that make
it clearly ascertainable or predictable technically that the failure set forth
in either (a) or (b) of this Section 12.02 will occur. An "outage unit" shall
mean the failure of Lessee's Transponders to meet the Transponder Performance
Specifications for a [***] period in one day (with each such [***] period in the
same day constituting a separate outage unit). As used herein, the term "day"
shall mean a 24-hour period of time commencing on 12:00 Midnight Eastern Time.
Lessee shall give HCG immediate notification of any such failure, as soon after
commencement of any such failure as is reasonably possible, and of the relevant
facts concerning such failure. Upon HCG's verification that Lessee's
Transponders have suffered a Confirmed Failure, such failure shall be deemed to
have commenced upon receipt by HCG of notification from Lessee, or HCG's actual
knowledge, whichever first occurs, of the Confirmed Failure. If HCG has actual
knowledge that one of Lessee's Transponders has suffered a failure which is
certain to become a Confirmed Failure with the passage of time, then HCG shall
so notify Lessee and such Lessee Transponder shall be deemed to have suffered a
Confirmed Failure upon such notification.
12.03 Repayment for Failed Transponder. For each Lessee Transponder
that has become a Failed Transponder, for which Lessee is entitled to cease
making Monthly Base Lease Rate payments, and for which Lessee has ceased making
Monthly Base Lease Rate payments, Lessee shall be entitled to a refund equal to
the product of a fraction, the numerator of which is the number of days from the
date
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
14
of such failure until the end of the calendar month in which such failure
occurred and the denominator of which is the total number of days in the
calendar month in which such failure occurred, multiplied by the applicable
Monthly Base Lease Rate actually paid by Lessee for such Transponders for the
calendar month in which such failure occurred. HCG may offset against any refund
due to Lessee pursuant to this Section 12.03 any amounts due from Lessee to HCG
under this Agreement (including, without limitation, any [***]). In addition, if
the performance of a Lessee Transponder is such that, while it fails to meet the
Transponder Performance Specifications, its performance is nonetheless of some
value to Lessee, then prior to accepting repayment calculated as aforesaid,
Lessee shall have the right to negotiate with HCG to determine if there is a
mutually agreeable reduced lease rate upon which Lessee is willing to continue
leasing such Transponder.
12.04 Limitation of Liability.
(a) ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
PURPOSE OR USE, ARE EXPRESSLY EXCLUDED AND DISCLAIMED EXCEPT TO THE
EXTENT SPECIFICALLY AND EXPRESSLY PROVIDED FOR IN SECTION 6.02. IT
EXPRESSLY IS AGREED THAT HCG'S SOLE OBLIGATIONS AND LIABILITIES
RESULTING FROM A BREACH OF THIS AGREEMENT, AND LESSEE'S EXCLUSIVE
REMEDIES FOR ANY CAUSE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
LIABILITY ARISING FROM NEGLIGENCE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND/OR THE TRANSACTIONS CONTEMPLATED HEREBY, ARE LIMITED TO
THOSE SET FORTH IN SECTIONS 9, 10 AND 12, HEREOF, AND ALL OTHER
REMEDIES OF ANY KIND ARE EXPRESSLY EXCLUDED, INCLUDING, WITHOUT
LIMITATION, ALL RIGHTS AND REMEDIES OF LESSEE UNDER DIVISION 10,
CHAPTER 5, ARTICLE 2 AND SECTIONS 10209, 10406 AND 10504 OF THE
CALIFORNIA UNIFORM COMMERCIAL CODE.
(b) IN NO EVENT SHALL HCG BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING BUT, NOT LIMITED TO, LOST PROFITS),
WHETHER FORESEEABLE OR NOT, OCCASIONED BY ANY DEFECT IN THE
TRANSPONDERS, DELAY IN DELIVERY OR PROVISION OF THE TRANSPONDERS,
FAILURE OF THE TRANSPONDERS TO PERFORM OR ANY OTHER CAUSE WHATSOEVER.
HCG MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO ANY OTHER PERSON OR
ENTITY CONCERNING THE TRANSPONDERS OR THE SATELLITES AND LESSEE SHALL
DEFEND AND INDEMNIFY HCG FROM ANY CLAIMS MADE UNDER ANY WARRANTY OR
REPRESENTATION BY LESSEE TO ANY THIRD PARTY. THE LIMITATIONS OF
LIABILITY SET FORTH HEREIN SHALL ALSO APPLY TO HCSS, THE XXXXXX
AIRCRAFT COMPANY (THE MANUFACTURER OF THE SATELLITE AND TRANSPONDERS)
AND ALL AFFILIATES THEREOF.
(c) Lessee shall indemnify and save HCG harmless from all
liability disclaimed by HCG, as specified in Sections 12.04(a) and (b)
above, to the extent such liability arises in connection with the
Services provided pursuant to this Agreement, including, without
limitation, Lessee's violation or alleged violation of any Laws
(including, without limitation, any Obscenity/Content Laws). Lessee
shall pay all expenses (including attorneys' fees) incurred by HCG in
connection with all legal or other formal or informal proceedings
concerning claims of third parties described in the preceding sentence,
and Lessee shall satisfy all judgments, costs, or other awards which
may be incurred by or rendered against HCG in such proceeding. Lessee
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
15
shall have the right to defend any legal or other formal or informal
proceedings concerning claims of third parties; provided, however, that
Lessee shall conduct such defense with legal counsel reasonably
satisfactory to HCG. Lessee shall pay any settlement of any such claim
or legal or other formal or informal proceeding, but Lessee shall not
agree to any settlement of any third party claim without first giving
thirty (30) days prior written notice of the terms and conditions of
such settlement to HCG and obtaining HCG's written consent to such
settlement, which consent shall not be unreasonably withheld or
delayed.
(d) Notwithstanding the limitations of the second sentence of
Section 12.04(a), Lessee and HCG each shall have the right to obtain
injunctive relief, if necessary, in order to prevent the other party
from willfully breaching its obligations under this Agreement or to
compel the other party to perform its obligations under this Agreement.
In this regard, both parties acknowledge and agree that Lessee's
Transponders to be provided hereunder are unique and not readily
available on the open market and that, if Lessee's Transponders are not
available to Lessee because the terms of the Agreement are not
fulfilled through no fault of Lessee and for reasons attributable to a
breach of this Agreement by HCG, then Lessee's remedies at law would
not be adequate. The parties further acknowledge and agree that if
Lessee breaches the terms of this Agreement, then HCG's remedies at law
would not be adequate.
(e) [***]. For purposes of this Agreement, [***].
12.05 Obligations of Lessee to Cooperate. If any of Lessee's
Transponders fail to meet the Transponder Performance Specifications, then
Lessee shall use reasonable efforts to cooperate and aid HCG in curing such
failure; provided that such efforts can be done at minimal or no cost to Lessee.
(a) These obligations of Lessee shall include, but not be
limited to, the following:
(i) If there is a problem which can be compensated for
by increasing the power of its transmission to Lessee's
Transponders, then Lessee shall do so, at HCG's cost and
expense, to the extent it can with existing equipment;
provided, however, that HCG shall not be able to require Lessee
to increase the power of its transmission if, by doing so, it
would cause interference with other Transponders on the
Satellite which is prohibited by Section 7.02 of this
Agreement, or interference with any other satellite; and
(ii) Permitting HCG, at HCG's cost and expense, to
upgrade Lessee's equipment; provided that Lessee shall be
entitled to select and install such equipment and determine its
configuration in accordance with its own existing operating
procedures and technical requirements, and in accordance with
applicable laws and regulations.
16
(b) HCG shall give notice to Lessee if and when it requires the
increase of power of the transmission of any other Owner pursuant to
such Owner's obligation equivalent to this Section 12.05. HCG shall
also give notice to Lessee when it acquires knowledge of any other
Transponder user uplinking at power levels which might cause
interference with Lessee's Transponders. If, after such increase in
power, any of Lessee's Transponders no longer meet its Transponder
Performance Specifications, HCG shall promptly take steps to reduce
interference, if any, prohibited by Section 7.02.
(c) Lessee's priority for the use of Transponder Spares under
Section 9 shall be determined at the time that any of its Transponders
would otherwise have become a Failed Transponder without Lessee's
cooperation under this Section 12.05. Regardless of Lessee's
cooperation under this Section 12.05, Lessee shall have the right to
exercise its right to the use of a Transponder Spare to which it would
have been entitled at the time that Lessee's Transponder was initially
determined to have failed had Lessee not taken such action.
13. Limitations on Transfer by Lessee
Except as specifically provided for in this Agreement, neither Lessee
nor HCG shall assign or otherwise Transfer (as defined below) its rights under
this Agreement except with the written consent of the other, which consent may
be given or withheld in such party's sole and absolute discretion, except that
HCG shall have the right to assign any or all of its rights or obligations
hereunder to any affiliate of HCG or its parent corporation, Xxxxxx Electronics
Corporation; provided, however, that the affiliate to which the HCG's
obligations are assigned shall have the technical capability to perform such
obligations. Nothing herein shall preclude HCG or its affiliates from engaging
in a transaction with respect to the Satellite commonly referred to as a
"sale-leaseback" provided that commercially reasonable steps are taken to
protect the interests of Lessee hereunder. Lessee shall not be permitted to
Transfer any of its rights under this Agreement to the Lessee's Transponders to
any third party except as otherwise specified in this Agreement or with the
written consent of HCG, which consent may be given or withheld in HCG's sole and
absolute discretion; provided, however, that Lessee shall have the right to
assign its rights hereunder to GLA (or its successor in interest conducting the
direct-to-home business currently conducted by GLA) without HCG's consent
provided that GLA agrees to be bound by this Agreement as if the original Lessee
hereunder. "Transfer" shall mean to grant, sell, assign, encumber, permit the
utilization of, license, lease, sublease or otherwise convey, directly or
indirectly, in whole or in part.
14. Utilization of Transponders for Services
HCG acknowledges that Lessee may utilize the Transponders to provide
services to third parties, including, without limitation, to GLA. HCG further
acknowledges that as long as such utilization does not conflict with any of the
other provisions of this Agreement, such utilization shall not constitute a
Transfer.
15. Monthly Satellite Reports
15.01 Reports. Lessee shall receive monthly reports on the overall
performance of Galaxy VIII(i) in the form of the Galaxy satellite status reports
similar to the Galaxy III-R satellite services monthly report, plus information
furnished to insurers.
15.02 Anomalous Operation Notification. HCG shall notify Lessee as
soon as possible by telephone, with prompt written confirmation thereafter, of
any significant anomalous condition of which
17
it has been informed by HCSS has been detected in the Transponders or associated
Satellite supporting subsystems and which have a material effect or potential
material effect on the Satellite. HCG shall also notify Lessee promptly of any
circumstances that make it clearly ascertainable or predictable that any of the
incidents described in this Section 15.02 will occur.
15.03 Maneuver Notification. To the extent operationally feasible,
HCG shall notify Lessee of all Satellite maneuvers, except for routine
station-keeping, at least three (3) days in advance of their scheduled
initiation and, if such maneuver will result in a change of the Satellite's
assigned orbital position, promptly following HCG's receipt of FCC authorization
or direction of such maneuver.
16. Confidentiality and Press Releases
16.01 Confidential Information. HCG and Lessee shall hold in
confidence this Agreement and all its Exhibits, including the financial terms
and provisions hereof and all information received pursuant to this Agreement,
including, without limitation, Section 15, and all other information related to
this Agreement not otherwise known to the public (collectively, "Confidential
Information"), and HCG and Lessee hereby acknowledge and agree that the
Confidential Information is confidential and proprietary and is not to be
disclosed to third persons without the prior written consent of both HCG and
Lessee. Neither HCG, nor Lessee, shall disclose such Confidential Information to
any third party (other than to officers, directors, employees and agents of HCG,
Lessee or GLA, each of whom shall be bound by this Section 16.01) except:
(a) to the extent necessary to comply with applicable law or
the valid order of a governmental agency or court of competent
jurisdiction, or to satisfy its obligations to other Owners of
Transponders; provided, however, that the party making such disclosure
shall seek confidential treatment of said information;
(b) as part of its normal reporting or review procedure to
regulatory agencies, its parent company, its auditors and its
attorneys; provided, that the party making such disclosure to any such
regulatory agency shall seek confidential treatment of such
information; and, provided, further, that any other third party to whom
disclosure is made agrees to the confidential treatment of such
information;
(c) in order to enforce its rights and perform its obligations
pursuant to this Agreement;
(d) to the extent necessary to obtain appropriate insurance, to
its insurance agent; provided that such agent agrees to the
confidential treatment of such information; and
(e) to the extent necessary to negotiate clauses that will be
common to all transponder lease agreements.
16.02 Notice Proceeding; Compelled Disclosure. In the event that
either party is requested (the "Disclosing Party") pursuant to, or becomes
compelled by, applicable law, regulation or legal process to disclose any
Confidential Information, the Disclosing Party will provide the other party with
prompt written notice so that the other party may seek a protective order or
other appropriate remedy or, in the other party's sole discretion, waive
compliance with the terms of this Agreement. In the event that no such
protective order or other remedy is obtained, or that the other party waives
compliance with the
18
terms of this Agreement, the Disclosing Party will furnish only that portion of
the Confidential Information which the Disclosing Party is advised by counsel is
legally required and cooperate, at the other party's sole cost and expense, with
the other party's efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information.
16.03 Press Releases. The parties agree that no press release
relating to this Agreement shall be issued without the approval of both
parties.
17. Disposition of Satellite
At the earlier of the time as (i) the remaining fuel on board Galaxy
VIII(i) less than [***] prior to launch, including uncertainty in estimate of
fuel, as determined by HCG in its sole discretion; (ii) there are fewer than
[***] Transponders capable of meeting their respective Transponder Performance
Specifications; or (iii) [***], HCG, in its sole discretion, may remove the
Satellite from its assigned orbital location. In such event, this Agreement
shall terminate, HCG shall have no further obligations to Lessee under this
Agreement, and Lessee's Transponders shall be deemed, without any further action
by any party, to be redelivered to HCG and HCG shall be entitled to immediate
possession thereof and HCG, in its sole discretion, may remove the Satellite
from its assigned orbital location. HCG shall thereafter have the right to
utilize such redelivered Transponders in any manner it determines. HCG will, to
the extent practicable, provide Lessee with ninety (90) days notice prior to the
disposition of Galaxy VIII(i) pursuant to this Section 17. Notwithstanding the
foregoing, until HCG so removes Galaxy VIII(i) or this Agreement is terminated
or expires in accordance with its provisions, HCG shall continue to make
available to Lessee the Lessee Transponders and Transponder Spares (subject to
the priority provisions contained herein) the use of Transponders and
Transponder Spares on the Satellite on operational and payment terms no less
favorable than HCG has offered to other lessees at such time. The "Satellite
Removal Date" shall mean the date on which HCG removes the Satellite from its
assigned orbital location in accordance with this Section 17.
18. Documents
Each party hereto agrees to execute and, if necessary, to file with the
appropriate governmental entities, such documents as the other party hereto
shall reasonably request in order to carry out the purpose of this Agreement.
19. Conflicts
In the case of a conflict between the provisions of this Agreement and
any Exhibit, the provisions of this Agreement will prevail.
20. Miscellaneous
20.01 Interest. The rate of interest referred to herein shall be
equal to the lower of (i) the rate per annum equal to [***] or (ii) the highest
legally permissible rate of interest. All interest or discounting shall be
compounded on a yearly basis. "Pro rata" shall mean an allocation on a straight
line basis based on number of days. All present value analyses shall use an
annual discount rate equal to the interest rate on the applicable date.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
19
20.02 Applicable Law and Entire Agreement. The existence, validity,
construction, operation and effect of this Agreement and the Exhibits hereto,
shall be determined in accordance with and be governed by the laws of the State
of California, without reference to the conflicts of laws principles thereof.
This Agreement and the Exhibits hereto, along with the Transponder Service
Agreement dated as of April 21, 1997, constitutes the entire agreement between
the parties, and supersedes all previous understandings, commitments or
representations concerning the subject matter hereof. The parties each
acknowledge that the other party has not made any representations other than
those which are contained herein.
20.03 Notices. All notices and other communications from either party
to the other hereunder (or copies of any such notices or other communications to
be delivered to GLA, the delivery of which (or failure to deliver) shall not
affect, in any manner, notice by or to either of the parties hereto) shall be in
writing and shall be deemed received upon actual receipt when personally
delivered, upon acknowledgement of receipt (electronically or otherwise) if sent
by facsimile or upon the expiration of the third business day after being
deposited in the United States mails, postage prepaid, certified or registered
mail, addressed to the other party as follows:
TO HCG:
If by mail: Xxxxxx Communications Galaxy, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Senior Vice President --
Galaxy Satellite Services
cc: Associate General Counsel
If by FAX: Xxxxxx Communications Galaxy, Inc.
Attention: Senior Vice President --
Galaxy Satellite Services
(000) 000-0000
cc: Associate General Counsel
(000) 000-0000
If by personal
delivery to its
principal place
of business at: Xxxxxx Communications Galaxy, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President --
Galaxy Satellite Services
cc: Associate General Counsel
20
TO LESSEE:
If by mail: California Broadcast Center, LLC
c/o DIRECTV International, Inc.
0000 X. Xxxxxxxx Xxx.
Xxxx X0, M/S X000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
If by FAX: California Broadcast Center, LLC
c/o DIRECTV International, Inc.
Attention: General Counsel
(000) 000-0000
If by personal
delivery to its
principal place
of business at: California Broadcast Center, LLC
c/o DIRECTV International, Inc.
0000 X. Xxxxxxxx Xxx.
Xxxx. X0, M/S X000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
TO GLA:
If by mail: Galaxy Latin America, LLC
0000 Xxxx Xxxxxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
If by FAX: Galaxy Latin America, LLC
Attn: Xxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
If by personal
delivery to: Galaxy Latin America, LLC
0000 Xxxx Xxxxxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
All payments to be made under this Agreement, if made by mail, shall be deemed
to have been made on the date of receipt thereof. The parties hereto may change
their addresses by giving notice thereof in conformity with this Section 20.03.
20.04 Severability. Nothing contained in this Agreement shall be
construed so as to require the commission of any act contrary to law, and
wherever there is any conflict between any provision of this Agreement and any
statute, law, ordinance, order or regulation, such statute, law, ordinance,
order or regulation shall prevail; provided, however, that in such event the
provisions of this Agreement so affected
21
shall be curtailed and limited only to the extent necessary to permit compliance
with the minimum legal requirement, and no other provisions of this Agreement
shall be affected thereby and all such other provisions shall continue in full
force and effect.
20.05 Taxes. If any property or sales taxes are asserted against HCG
after, or as a result of, Delivery, by any local, state, national or
international, public or quasi-public governmental entity, in respect of
Lessee's Transponders or the lease thereof to Lessee, Lessee shall be solely
responsible for such taxes. At Lessee's expense, HCG shall cooperate with Lessee
in contesting in good faith any such taxes. If any taxes, charges or other
levies are asserted by reason of the use of the point in space or the frequency
spectrum at that point in space in which the Satellite containing Lessee's
Transponders are located, or the use or ownership of such Satellite (excluding
any FCC license fee imposed on the Satellite itself, as compared to the
Transponders, which license fee shall be paid by HCG), and such taxes are not
specifically allocated among the various components of such Satellite, then HCG,
Lessee and any other Owners of such transponders shall each pay a proportionate
amount of such taxes based on the number of transponders each of them owns or
leases.
20.06 Successors. Subject to Section 13, this Agreement shall be
binding on and shall inure to the benefit of any successors and assigns of the
parties; provided that no Transfer of this Agreement shall relieve either party
hereto of its obligations to the other party. Any purported Transfer by either
party not in compliance with the provisions of this Agreement shall be null and
void and of no force and effect.
20.07 Rules of Construction. Any ambiguities shall be resolved
without reference to which party may have drafted this Agreement. All Article or
Section titles or captions contained in this Agreement are for convenience only,
and they shall not be deemed part of this Agreement and in no way define, limit,
extend or describe the scope or limit of any provisions hereof. Unless the
context otherwise requires: (i) a term has the meaning assigned to it; (ii) "or"
is not exclusive; (iii) words in the singular include the plural, and words in
the plural include the singular; (iv) provisions apply to successive events and
transactions; (v) "herein," "hereof" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision; (vi) all references to "Sections" refer to Sections of this
Agreement unless otherwise specifically indicated; and (vii) any pronoun used in
this Agreement shall include the corresponding masculine, feminine and neuter
forms.
20.08 Survival of Representations and Warranties. All representations
and warranties contained herein or made by HCG or Lessee in connection herewith
shall survive any independent investigation made by HCG or Lessee.
20.09 No Third-Party Beneficiaries. The provisions of this Agreement
are for the benefit only of the parties hereto, and no third party may seek to
enforce, or benefit from, these provisions, except that both parties acknowledge
and agree that the provisions of Sections 7.02, 8, 9.01 and 9.02 are intended
for the benefit of both HCG and all other Owners. Both parties agree that any
other such Owner shall have the right to enforce, as a third-party beneficiary,
the provisions of Sections 7.02, 8, 9.01 and 9.02, against Lessee directly, in
an action brought solely by such other Owner, or may join with HCG or any other
Owner, in bringing an action against Lessee for violation of such Sections.
Notwithstanding the preceding sentence, both parties agree that the provisions
of [***]. In addition, if (i) HCG ceases to provide to Lessee use of the
Lessee's Transponders in breach of the terms of this Agreement, (ii) Lessee is
not in breach of its obligations under this Agreement and (iii) Lessee has
refused to take any action to attempt to restore its use of the Lessee's
Transponders, then [***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
22
[***].
20.10 Non-Waiver of Breach. Either party hereto may specifically
waive any breach of this Agreement by the other party, provided that no such
waiver shall be binding or effective unless in writing and no such waiver shall
constitute a continuing waiver of similar or other breaches. A waiving party, at
any time, and upon notice given in writing to the breaching party, may direct
future compliance with the waived term or terms of this Agreement, in which
event the breaching party shall comply as directed from such time forward.
20.11 Amendments. This Agreement may not be amended or modified in
any way, and none of its provisions may be waived, except by a writing signed by
an authorized officer of the party against whom the amendment, modification or
waiver is sought to been enforced.
20.12 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.
(signature page follows)
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
23
IN WITNESS WHEREOF, each of the parties hereto has duly
executed and delivered this Agreement as of the day and year first written
above.
XXXXXX COMMUNICATIONS GALAXY, INC.
By: /s/Xxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
CALIFORNIA BROADCAST CENTER, LLC
By: DTVI One, Inc., its Managing Member
By: /s/Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
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