-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IWIAsHw7081rETrgCGUKDTYN99g3D/RyxpqwA9Ykz3CnfIMRrxC9UNiQCJ/5bcMq 5qqXCrURdhjfYjA+YkXzDA== 0000893838-98-000090.txt : 19980518 0000893838-98-000090.hdr.sgml : 19980518 ACCESSION NUMBER: 0000893838-98-000090 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PANAMSAT CORP /NEW/ CENTRAL INDEX KEY: 0001037388 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 954607698 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22531 FILM NUMBER: 98626230 BUSINESS ADDRESS: STREET 1: P O BOX PICKWICK PLAZA CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036226664 MAIL ADDRESS: STREET 1: ONE PICKWICK PLAZA STREET 2: C/O PAN AM SAT CITY: GREENWICH STATE: CT ZIP: 06830 FORMER COMPANY: FORMER CONFORMED NAME: MAGELLAN INTERNATIONAL INC DATE OF NAME CHANGE: 19970408 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 Commission File No. 0-22531 PanAmSat Corporation (Exact Name of Registrant as Specified in its Charter) Delaware 95-4607698 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) One Pickwick Plaza, Greenwich, CT 06830 (Address of Principal Executive Offices) Registrant's telephone number, including area code: 203-622-6664 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO As of March 31, 1998, an aggregate of 149,150,246 shares of the Company's Common Stock were outstanding. Cautionary Statement For Purposes Of The "Safe Harbor" Provisions Of The Private Securities Litigation Reform Act of 1995 This Quarterly Report contains historical information and forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. When used in this Form 10-Q the words "estimate," "project," "anticipate," "expect," "intend," "believe" and other similar expressions are intended to identify forward-looking statements and information. The Company identifies the following important factors which could cause the Company's actual results to differ materially from any results which might be projected, forecasted, estimated or budgeted by the Company in forward-looking information: (i) risks associated with technology, (ii) regulatory risks, (iii) effect of loss of key personnel, and (iv) litigation. Such factors are more fully described under the caption "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997. Reference is also made to such other risks and uncertainties detailed from time to time in the Company's other filings with the Securities and Exchange Commission. The Company cautions that the foregoing list of important factors is not exclusive. Furthermore, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company's control. PanAmSat Corporation CONSOLIDATED BALANCE SHEETS (in thousands)
March 31, December 31, 1998 1997 ----------- ------------ (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 48,569 $ 91,739 Accounts receivable-net 82,266 41,030 Net investment in sales-type leases 27,767 27,757 Prepaid expenses and other 83,705 77,891 Deferred income taxes 41,952 46,940 ----------- ------------ Total current assets 284,259 285,357 SATELLITES AND OTHER PROPERTY AND EQUIPMENT-Net 2,671,985 2,506,082 NET INVESTMENT IN SALES-TYPE LEASES 302,429 324,689 GOODWILL-Net of amortization 2,482,258 2,498,498 DEFERRED CHARGES AND OTHER ASSETS 54,729 67,808 ----------- ------------ TOTAL ASSETS $ 5,795,660 $ 5,682,434 ----------- ------------
The accompanying notes are an integral part of these consolidated financial statements PanAmSat Corporation CONSOLIDATED BALANCE SHEETS - (continued) (in thousands, except share data)
March 31, December 31, 1998 1997 ----------- ------------ (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 16,259 $ 16,398 Accounts payable and accrued liabilities 25,316 26,828 Deferred gains on sales-leasebacks 37,977 42,870 Deferred revenues 14,106 18,822 ----------- ------------ TOTAL CURRENT LIABILITIES 93,658 104,918 DUE TO AFFILIATES (PRINCIPALLY MERGER-RELATED INDEBTEDNESS) 1,801,229 1,802,195 LONG-TERM DEBT 786,660` 640,123 DEFERRED GAINS ON SALE-LEASEBACKS 161,186 191,882 DEFERRED INCOME TAXES 203,798 179,267 OTHER LIABILITIES AND DEFERRED CREDITS 98,096 103,029 ACCRUED OPERATING LEASEBACK EXPENSE 54,494 100,184 ----------- ------------ TOTAL LIABILITIES $ 3,199,121 $ 3,121,598 ----------- ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common Stock, $0.01 par value 400,000,000 shares authorized, 149,150,246 shares issued and outstanding 1,491 1,491 Additional paid-in-capital 2,501,699 2,501,344 Retained earnings 93,349 58,001 ----------- ------------ Total Stockholders' Equity 2,596,539 2,560,836 ----------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,795,660 $ 5,682,434 ----------- ------------
The accompanying notes are an integral part of these consolidated financial statements PanAmSat Corporation CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended March 31, 1998 and 1997 (in thousands, except share data)
March 31, March 31, 1998 1997 ----------- ------------ REVENUES: Operating leases, satellite services and other $ 181,788 $ 86,527 Outright sales and sales type leases 11,237 41,026 ----------- ------------ Total revenues 193,025 127,553 ----------- ------------ OPERATING COSTS AND EXPENSES: Cost of outright sales and sales type leases - 16,422 Leaseback expense, net of deferred gain 13,762 15,417 Depreciation and amortization 58,002 14,585 Direct operating costs 22,321 8,158 Selling, general and administrative expenses 14,064 5,460 ----------- ------------ Total operating costs and expenses 108,149 60,042 ----------- ------------ INCOME FROM OPERATIONS 84,876 67,511 INTEREST EXPENSE, NET (22,208) (1,778) OTHER INCOME - 1,232 ----------- ------------ INCOME BEFORE INCOME TAXES 62,668 66,965 INCOME TAXES 27,320 25,112 ----------- ------------ NET INCOME $ 35,348 $ 41,853 ----------- ------------ NET INCOME PER COMMON SHARE - BASIC AND DILUTED $ 0.24 $ - ----------- ------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 149,403,886 - ----------- ------------
The accompanying notes are an integral part of these consolidated financial statements PanAmSat Corporation CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three Months Ended March 31, 1998 and 1997 (in thousands)
March 31, March 31, 1998 1997 ----------- ------------ CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: Net income $ 35,348 $ 41,853 Adjustments to reconcile net income to net cash provided by operating activities: Cost of outright sales - 4,838 Gross profit on sales-type leases - (12,124) Depreciation and amortization 58,002 14,585 Deferred income taxes 29,519 7,510 Amortization of gains on sale-leasebacks (9,902) (10,717) Provision for uncollectible receivables - (4,534) Interest expense capitalized (16,977) (5,254) Changes in assets and liabilities: Collections on investments in sales-type leases 22,250 5,536 Operating lease and other receivables (28,157) (17,664) Prepaid expenses and other current assets (5,814) 4,771 Accounts payable and accrued liabilities (2,139) (1,037) Accrued operating leaseback expense (26,810) (35,173) Deferred gains and revenues (9,021) (619) ----------- ------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 46,299 (8,029) ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures (138,681) (349,471) Early buyout of sale-leaseback (96,574) - ----------- ------------ NET CASH USED IN INVESTING ACTIVITIES (235,255) (349,471) ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: New borrowings 875,000 - Net contributions from parent company - 357,503 Repayments of long-term debt (729,568) - Stock issued to 401(k) plan 354 - ----------- ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 145,786 357,503 ----------- ------------ NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS (43,170) 3 CASH AND EQUIVALENTS, beginning of period 91,739 29 ----------- ------------ CASH AND EQUIVALENTS, end of period $ 48,569 $ 32 ----------- ------------ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash received for interest $ 3,893 $ - ----------- ------------ Cash paid for interest $ 31,610 $ - ----------- ------------ Cash paid for taxes $ 1,719 $ - ----------- ------------
The accompanying notes are an integral part of these consolidated financial statements PanAmSat Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) General. These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature necessary to present fairly the financial position, results of operations and cash flows as of and for the three-month periods ended March 31, 1998 and 1997 have been made. Operating results for the three months ended March 31, 1998 and 1997 are not necessarily indicative of the operating results for the full year. For further information, refer to the financial statements and footnotes thereto included in PanAmSat's Annual Report on Form 10-K for the fiscal year ended December 31, 1997. (2) Business Combination. The Company commenced operations on May 16, 1997 upon the merger of PanAmSat International Systems, Inc. (then operating under its previous name, PanAmSat Corporation ("PanAmSat International")) and the Galaxy Satellite Services division of Hughes Communications, Inc. (the "Galaxy Business") (the "Combination"). Pursuant to the Combination, the aggregate consideration paid to PanAmSat International shareholders consisted of approximately $1.5 billion in cash and approximately 42.5 million shares of PanAmSat Common Stock having an estimated value of $1.3 billion. Concurrent with the Combination and as an integral part thereof, the Company sold its direct-to-home ("DTH") television rights in certain foreign markets to an affiliate for $225 million (the "DTH Options"). The Company has applied the purchase method of accounting to the transaction with the Galaxy Business as the acquiror. The purchase price has been allocated to the assets acquired and liabilities assumed based on estimates of their respective fair values. Assets acquired totaled $2.0 billion, liabilities assumed were $3.2 billion (including $1.7 billion of merger debt) and shares valued at $1.3 billion were issued in the transaction. A total of $2.5 billion, representing the excess of acquisition value over the fair value of PanAmSat International's net tangible assets, has been allocated to intangible assets and is being amortized over 40 years. The Company's consolidated results of operations have incorporated PanAmSat International's activity commencing upon the effective date of the Combination. The unaudited pro forma information shown below for the three months ended March 31, 1997, presents combined results of operations as if the Combination had occurred at the beginning of 1997 (excluding the impact of the $225 million gain on the sale of the DTH Options as well as certain professional and advisory fees incurred in connection with the Combination totaling $31.6 million, both of which are non-recurring items that are not PanAmSat Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) indicative of the Company's ordinary course of business). The unaudited pro forma information shown below for the three months ended March 31, 1997 is not necessarily indicative of the results of operations of the combined company had the Combination occurred at the beginning of 1997, nor is the information shown below necessarily indicative of future results. (unaudited; in thousands, except per share data) Three Months Ended March 31, ------------- 1998 1997 (Pro forma) ---- ---- Revenues $ 193,025 $ 202,092 Net income 35,348 24,075 Net income per share -basic and diluted 0.24 0.16 (3) New Accounting Pronouncements. In June 1997, the financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which requires a statement of comprehensive income to be included in the financial statements for fiscal years beginning after December 15, 1997. The adoption of this statement in the first quarter of 1998 resulted in no change to total comprehensive income. In addition, in June 1997 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131 (FAS 131), "Disclosures about Segments of an Enterprise and Related Information", which requires disclosure of certain information about operating segments and about products and services, the geographic areas in which a company operates and their major customers. Any resulting change in disclosure will be reflected in the consolidated financial statements for the year ended December 31, 1998. (4) Galaxy VIII-i: Placed in Service. On December 8, 1997, the Company successfully launched its Galaxy VIII-i Atlantic Ocean Region Satellite, the dedicated transmission platform for the Galaxy Latin America DTH television service called DIRECTV. The 3560-kilogram satellite will transmit more then 200 digital television and music channels for reception by Galaxy Latin America's growing DTH subscriber base. Galaxy VIII-i is co-located at 95 degrees west longitude with the Galaxy IIIR satellite and commenced service on February 24, 1998, after successful completion of its in-orbit testing. (5) Financing Activities. On January 16, 1998, PanAmSat completed a private placement pursuant to Rule 144A under the Securities Act of 1933 for $750 million aggregate principal amount of new debt securities (the "Offering"). The net proceeds from the Offering were used to repay bank loans incurred to finance the tender offer for certain debt securities of PanAmSat's subsidiaries, as well as for general corporate purposes. PanAmSat Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In connection with the Offering, the Company executed a Credit Agreement (the "Credit Agreement") with certain lenders and Citicorp USA, Inc. as administrative agent. The Credit Agreement amends and restates the credit agreement among the parties dated December 24, 1997 (the "Original Credit Agreement"). The Original Credit Agreement provided the Company with up to $500 million of revolving credit loans (the "Revolving Credit Loans")for five years, and up to $300 million in short-term loans maturing on April 30, 1998 (the "Term Loans"). The Credit Agreement amends the Original Credit Agreement to terminate the Term Loan facility. The Company currently has $500 million of Revolving Credit Loans available to it under the Credit Agreement. Also in connection with the Offering, the Company entered into certain U.S. Treasury rate lock contracts to reduce its exposure to fluctuations in interest rates. The aggregate nominal value of these contracts was $375 million and these contracts were accounted for as hedges because they were applied to a specific refinancing plan that was consummated shortly after December 31, 1997. The cost to unwind these instruments during the first quarter of 1998 was approximately $9 million and will be amortized to expense over the term of the newly-placed debt securities to which such hedges were applied. (6) Subsequent Event. Subsequent to March 1998, the Company became aware of certain anomalies and their effects relative to its Galaxy IV spacecraft which serves the domestic U. S. marketplace. These anomalies are expected to shorten substantially the useful life of the satellite and to affect services to some of the C-band transponder customers on the satellite. Management is evaluating the effects of these anomalies and is working with its customers to develop plans to meet their requirements and to satisfy the Company's obligations to certain of the customers. The Company intends to procure a replacement satellite on an accelerated basis for a scheduled in-service date before the Galaxy IV spacecraft reaches the end of its expected useful life. As with its other satellites, the Company has insurance coverage on the affected satellite and intends to file a claim with its insurance carriers in the near future. Based on the information currently available, management has evaluated the potential financial statement impact of these anomalies in accordance with its stated accounting policies and does not believe that a material loss will result from these anomalies because remaining revenues to be earned on the satellite together with the expected insurance recovery will enable the Company to recover its investment in the satellite and any other costs it may incur. PanAmSat Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations. The Company's results of operations have incorporated PanAmSat International's activity commencing on May 16, 1997, the effective date of the Combination. Since the results of operations for the three months ended March 31, 1997 would include no activity for PanAmSat International, management has determined that for comparative purposes, it would be more meaningful to present the information shown below on a "pro forma" basis reflecting the Combination as though it had occurred at the beginning of 1997 (excluding the impact of the $225 million gain on the sale of the DTH Options as well as certain professional and advisory fees incurred in connection with the Combination totaling $31.6 million, both of which are non-recurring items that are not indicative of the Company's ordinary course of business.) The pro forma results for the three months ended March 31, 1997 are not necessarily indicative of the combined results that would have occurred had the Combination actually occurred at the beginning of fiscal 1997.
(unaudited; in thousands, except per share data) Three Months Ended March 31, ---------------------------- 1998 1997 (Pro forma) ---- ---- Revenues Operating leases, satellite services and other $ 181,788 $ 161,066 Outright sales and sales type leases 11,237 41,026 ---------- ---------- Total Revenues 193,025 202,092 ---------- ---------- Costs and Expenses Cost of outright sales and sales type leases - 16,422 Leaseback expense, net of deferred gain 13,762 15,417 Direct operating and SG&A costs 36,385 32,539 Depreciation and amortization 58,002 46,313 ---------- ---------- Total 108,149 110,691 ---------- ---------- Income from operations 84,876 91,401 Interest expense, net 22,208 30,993 Other income - (1,232) ---------- ---------- Income before income taxes and minority interest 62,668 61,640 Income tax expense 27,320 29,673 Minority interest - 7,892 ---------- ---------- Net income $35,348 $ 24,075 ---------- ---------- Net income per share - basic and diluted $ 0.24 $ 0.16
PanAmSat Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Revenues. Revenues decreased $9.1 million, or 4%, to $193.0 million for the three months ended March 31, 1998 from $202.1 million for the same pro forma period in 1997. Video services revenues were $143.1 million for the three months ended March 31, 1998, a decrease of 16% from the same pro forma period in 1997. The decrease was primarily due to less sales and sales-type lease activity as compared to the first quarter of 1997. Telecommunications services revenues were $37.5 million for the three months ended March 31, 1998, an increase of 17% from the same pro forma period in 1997. The increase was due primarily to the start of several new carrier and Internet-related service agreements during the quarter. The revenue results can also be analyzed based on the type of agreement. Revenues from sales and sales-type leases decreased to $11.2 million for the three months ended March 31, 1998 from $41.0 million for the same pro forma period in 1997. The decrease is attributable to a lower volume in 1998 relative to 1997 of outright sales and sales-type leases. Revenues from operating leases of transponders, satellite services and other increased $20.7 million, or 13%, to $181.8 million for the three months ended March 31, 1998 from $161.1 million for the same pro forma period in 1997 due primarily to increased service agreements associated with available transponder capacity and the provision of short-term, special events services. Cost of Outright Sales and Sales-Type Leases of Transponders. The Company recorded no cost of outright sales and sales-type leases of transponders for the three months ended March 31, 1998, as compared to $16.4 million for the same pro forma period in 1997. The pro forma cost of outright sales and sales-type leases of transponders for the three months ended March 31, 1997 are related to several outright sales and sales-type leases executed during that period. Leaseback Expense, Net of Deferred Gain. Leaseback expense, net of deferred gain, decreased $1.6 million, or 10%, to $13.8 million for the three months ended March 31, 1998 from $15.4 million for the same pro forma period in 1997. The decrease is primarily attributable to the exercise by the Company of an early buy out opportunity on one of its sale-leaseback arrangements during the first quarter of 1998. Direct Operating and Selling, General and Administrative Costs. Direct operating and selling, general and administrative costs increased $3.9 million, or 12%, to $36.4 million for the three months ended March 31, 1998 from $32.5 million for the same pro forma period in 1997. The increase is due primarily to additional costs associated with satellites launched since the first quarter of 1997. PanAmSat Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Depreciation and Amortization. Depreciation and amortization increased $11.7 million, or 25%, to $58.0 million for the three months ended March 31, 1998 from $46.3 million for the same pro forma period in 1997, due primarily to depreciation expense associated with additional satellites placed in service. Income from Operations. Income from operations decreased $6.5 million, or 7%, to $84.9 million for the three months ended March 31, 1998 from $91.4 million for the same pro forma period in 1997, due primarily to the decrease in total revenues. Interest Expense, Net. Interest expense, net decreased $8.8 million, or $28%, to $22.2 million for the three months ended March 31, 1998 from $31.0 million for the same pro forma period in 1997. The decrease was due primarily to the reduction in the company's overall blended interest rate as a result of the debt tender offer and restructuring program for certain debt securities of PanAmSat's subsidiaries which commenced in November 1997. Income Tax Expense. Income tax expense decreased $2.4 million, or 8%, to $27.3 million for the three months ended March 31, 1998 from $29.7 million for the same pro forma period in 1997. The decrease was due to a lower effective tax rate in 1998 principally as a result of utilization of foreign sales corporation tax credits. Minority Interest. Minority interest, representing perferred stock dividends of PanAmSat International, were $0 for the three months ended March 31, 1998 as compared to $7.9 million for the same pro forma period in 1997. The decrease was due to the conversion of PanAmSat International's 12 1/4% Mandatorily Exchangeable Senior Redeemable Preferred Stock due 2005 into 12 3/4% Senior Subordinated Notes due 2005 (the "Exchange Notes") in the third quarter of 1997 and the related termination of dividend payment obligations. Approximately 99% of the Exchange Notes were subsequently retired in connection with the tender offer and restructuring program described above. Galaxy IV Satellite Update. Subsequent to March 1998, the Company became aware of certain anomalies and their effects relative to its Galaxy IV spacecraft which serves the domestic U. S. marketplace. These anomalies are expected to shorten substantially the useful life of the satellite and to affect services to some of the C-band transponder customers on the satellite. Management is evaluating the effects of these anomalies and is working with its customers to develop plans to meet their requirements and to satisfy the Company's obligations to certain of the customers. The Company intends to procure a replacement satellite on an accelerated basis for a scheduled in-service date before the Galaxy IV spacecraft reaches the end of its expected useful life. As with its other satellites, the Company has insurance coverage on the affected satellite and intends to file a claim with its insurance carriers in the near future. Based on the information currently available, management has evaluated the potential financial statement impact of these anomalies in accordance with its stated accounting policies and does not believe that a material loss will result from these anomalies because remaining revenues to be earned on the satellite together with the expected insurance recovery will enable the Company to recover its investment in the satellite and any other costs it may incur. Financial Condition. Pursuant to the Combination, aggregate consideration paid to PanAmSat International shareholders consisted of approximately $1.5 billion in cash and approximately 42.5 million shares of PanAmSat Common Stock. In connection with the Combination, the Company obtained a term loan in the amount of $1.725 billion from Hughes Electronics Corporation, an affiliate of the company ("HE"). In addition to the $1.725 billion loan, at March 31, 1998 the Company also had long-term indebtedness of $862.9 million (comprised primarily of $750 million of bonds under the Offering (as defined below) and $76.2 million due to affiliates). The significant cash outlays for the Company will continue to be primarily capital expenditures related to the construction and launch of satellites and debt service costs. With the commencement of construction of PAS-6B, the Company now has seven satellites under various stages of development for which the Company has budgeted capital expenditures. The Company will require approximately $900 million to complete the construction, insurance and launch of PAS-6B, PAS-7, PAS-8, Galaxy X, Galaxy XI, PAS-9, and PAS-1R, together with related equipment. This amount is expected to be funded from cash flow from operations, vendor financing and borrowings under the credit Agreement (as defined below). In addition to funding the PanAmSat Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS construction and launch of new satellites, the Company also expects to exercise its remaining early buy-out options under certain satellite sale-leaseback transactions entered into in prior years which will require the Company to fund outlays of approximately $152 million in 1998 (for which an early buy-out option for $96.6 million relating to transponders on SBS-6 was exercised by the Company in January 1998) and approximately $366 million in 1999. Such additional outlays are expected to be funded from cash flow from operations and borrowings under the Credit Agreement. On January 16, 1998, PanAmSat completed a private placement pursuant to Rule 144A under the Securities Act of 1933 for $750 million aggregate principal amount of new debt securities (the "Offering"). The net proceeds from the Offering were used to repay bank loans incurred to finance the tender offer for certain debt securities of PanAmSat's subsidiaries, as well as for general corporate purposes. In connection with the Offering, the Company executed a Credit Agreement (the "Credit Agreement") with certain lenders and Citicorp USA, Inc. as administrative agent. The Credit Agreement amends and restates the credit agreement among the parties dated December 24, 1997 (the "Original Credit Agreement"). The Original Credit Agreement provided the Company with up to $500 million of revolving credit loans (the "Revolving Credit Loans") for five years, and up to $300 million in short-term loans maturing on April 30, 1998 (the "Term Loans"). The Credit Agreement amends the Original Credit Agreement to terminate the Term Loan facility. The Company currently has $500 million of Revolving Credit Loans available to it under the Credit Agreement. PanAmSat believes that the Credit Agreement, vendor financing, future cash flow from operations (assuming satellites in development are successfully launched and commence service on the schedule currently contemplated) and cash on hand will be sufficient to fund PanAmSat's operations, anticipated exercise of early buy-out options on certain satellite sale-leaseback transactions and its remaining costs for the construction and launch of satellites currently under development for the next twelve months. There can be no assurance, however, that PanAmSat's assumptions with respect to future construction and launch costs will be correct, or that additional vendor financing, PanAmSat's future cash flow from operations and borrowings under the Credit Agreement will be sufficient to cover any shortfall in funding for future launches caused by launch failures, cost overruns, delays or other unanticipated expenses. If circumstances were to require PanAmSat to incur additional indebtedness, the ability of PanAmSat to incur any such additional indebtedness would be subject to the terms of PanAmSat's outstanding indebtedness. The failure to obtain such financing could have a material adverse effect on PanAmSat's operations and its ability to accomplish its business plan. PanAmSat Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net cash provided by (used in) operating activities increased to $46.3 million for the three months ended March 31, 1998 from $(8.0) million for the three months ended March 31, 1997. The increase in 1998 was primarily attributable to larger adjustments related to amounts of depreciation and amortization and deferred income taxes as a result of the Combination. Net cash used in investing activities decreased to $235.3 million for the three months ended March 31, 1998, from $349.5 million for the three months ended March 31, 1997. The decrease in 1998 was primarily attributable to fewer capital expenditures for satellite systems under development as compared to the same period in 1997. Net cash provided by financing activities decreased to $145.8 million for the three months ended March 31, 1998 from $357.5 million for the three months ended March 31, 1997. The decrease in 1998 was primarily due to new borrowings in connection with the Offering, the proceeds of which were used to repay bank loans incurred to finance the recent tender offer for certain debt securities of PanAmSat's subsidiaries and for general corporate purposes. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit No. 3.2 Restated Bylaws of PanAmSat. 10.9.5 Side Letter, dated as of March 9, 1998, to Agreement for Launching into Geostationary Transfer Orbit of the PanAmSat 6 Satellite by an Ariane Launch Vehicle, No. 94.5.918, between PanAmSat International and Arianespace S.A., constituting Exhibit 10.12 to Amendment No. 4 to PanAmSat International's Registration Statement on Form S-1 (Reg. No. 33-84836), dated March 29, 1995. (1) 10.15.5 Amendment No. 3, dated as of January 8, 1998, to Agreement for Launching into Geostationary Orbit of PanAmSat Satellites by an Ariane Launch Vehicle, No. 95.5.933, between PanAmSat International Systems, Inc. and Arianespace S.A., constituting Exhibit 10.12.3 to PanAmSat International's Quarterly Report on Form 10-Q for the period ended March 31, 1996. (1) 10.15.6 Amendment No. 1, dated as of January 8, 1998, to Side Letter to Agreement for Launching into Geostationary Transfer Orbit of PanAmSat Satellites by an Ariane Launch Vehicle, No. 95.5.933, between PanAmSat International and Arianespace S.A., constituting Exhibit 10.12.4 to PanAmSat International's Quarterly Report on Form 10-Q for the period ended March 31, 1996. (1) 10.15.7 Amendment No. 4, dated as of March 9, 1998, to Agreement for Launching into Geostationary Transfer Orbit of PanAmSat Satellites by an Ariane Launch Vehicle, No. 95.5.933, between PanAmSat and Arianespace S.A., constituting Exhibit 10.12.3 to PanAmSat International's Quarterly Report on Form 10-Q for the period ended March 31, 1996. (1) 10.15.8 Side Letter No. 2, dated as of March 9, 1998, to Agreement for Launching into Geostationary Transfer Orbit of PanAmSat Satellites by an Ariane Launch Vehicle, No. 95.5.933, between PanAmSat International and Arianespace S.A., constituting Exhibit 10.12.3 to PanAmSat International's Quarterly Report on Form 10-Q for the period ended March 31, 1996. (1) 10.18.3 Amendment, dated as of March 5, 1998, to Letter Agreement between the News Corporation Limited, Globo Comunicacoes e Participacoes, S.A., Grupo Televisa, S.A. and PanAmSat International, constituting Exhibit 10.17.1 to PanAmSat International's Quarterly Report on Form 10-Q/A for the period ended March 31, 1996. (1) 10.25.1 Amendment, dated as of March 5, 1998, to Full-Time Transponder Service Agreement From PAS-3 (European Beam) between PanAmSat International and Televisa S.A., constituting Exhibit 10.16 to PanAmSat International's Quarterly Report on Form 10-Q for the period ended September 30, 1996. (1) 10.27.2 Second Amended and Restated Transponder Purchase and Sale Agreement, dated as of March 5, 1998, between PanAmSat International and NetSat Servicos Ltda. (1) 10.41.2 Schedule identifying substantially identical agreements to the Indemnity Agreement constituting Exhibit 10.41 to PanAmSat's Quarterly Report on Form 10-Q for the period ended June 30, 1997 in favor of Charles H. Noski, Frederick A. Landman, Patrick J. Costello, Steven D. Dorfman, John J. Higgins, Ted G. Westerman, Dennis F. Hightower, James M. Hoak, Joseph R. Wright, Jr., Michael T. Smith, Lourdes Saralegui, Carl A. Brown, Kenneth N. Heintz, Robert A. Bednarek, James W. Cuminale, David P. Berman and Roxanne S. Austin. 10.45.1 Amendment, dated as of March 6, 1998, to the Agreement between PanAmSat International and Frederick A. Landman, constituting Exhibit 10.11.16 of PanAmSat International's Quarterly Report on Form 10-Q for the period ended June 30, 1996. 10.51 Fixed Price Contract for PAS 6B HS601HP Spacecraft, Related Services and Documentation--Contract No. 98-PAS-001, dated as of March 9, 1998, between PanAmSat International and Hughes Space and Communications Company. (1) 10.52 Transponder Service Agreement, dated as of March 5, 1998, between PanAmSat International and Sky Multi-Country Partners. (1) 27 Financial Data Schedule - -------- (1) Portions of this Exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. (b) Reports on Form 8-K. Registrant filed a Current Report on Form 8-K, dated January 16, 1998, in respect of Registrant's press release dated January 16, 1998 announcing the consummation of an offering of certain debt securities of the Registrant (Items 5 and 7(c)). Registrant filed a Current Report on Form 8-K/A, dated March 25, 1998, in respect of pro forma financial information in connection with the merger of PanAmSat International and the Galaxy Services division of Hughes Communications, Inc. (Items 7(b) and (c)). SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PanAmSat Corporation Date: May 15, 1998 /s/ Kenneth N. Heintz ---------------------------- Kenneth N. Heintz Executive Vice President and Chief Financial Officer and a Duly Authorized Officer of the Company EX-3 2 EXHIBIT 3.2 Exhibit 3.2 RESTATED BYLAWS OF PANAMSAT CORPORATION ARTICLE I Stockholders SECTION 1.1. Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. SECTION 1.2. Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, or by a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors, include the power to call such meetings, but such special meetings may not be called by any other person or persons. SECTION 1.3. Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given that shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the certificate of incorporation or these Bylaws, the written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. SECTION 1.4. Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 1.5. Quorum. Except as otherwise provided by law, the certificate of incorporation or these Bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. Where a separate vote by a series, class or classes is required, a majority of the outstanding shares of stock of such class or classes on any particular issue, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum for purposes of such issue. In the absence of a quorum, the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided in Section 1.4 of these Bylaws until a quorum shall attend. Shares of its own stock belonging to 1 the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. SECTION 1.6. Organization. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in his absence by the President, or in his absence by an Executive Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting. The chairman of the meeting shall announce at the meeting of stockholders the date and time of the opening and the closing of the polls for each maker upon which the stockholders will vote. SECTION 1.7. Voting; Proxies. Each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. All other elections and questions shall, unless otherwise provided by law, the certificate of incorporation, these Bylaws or the rules or regulations of any stock exchange applicable to the Corporation, be decided by the affirmative vote of the holders of shares of stock having a majority of the votes present in person or represented by proxy and entitled to vote thereon. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from is date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot. SECTION 1.8. Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (i) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten (10) days before the date of such meeting; and (ii) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall 2 apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjured meeting. SECTION 1.9. List of Stockholders Entitled to Vote. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. SECTION 1.10. Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 1.9 of this ARTICLE I, or to vote in person or by proxy at any meeting of stockholders. SECTION 1.11. Conduct of Meetings. The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine: (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent otherwise determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. SECTION 1.12. Advance Notice of Stockholder Nominations and Business. (A) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting and complies with the notice procedures set forth in this Bylaw. (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(l) of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a 3 stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether the proponent intends or is part of a group which intends to solicit proxies from other stockholders in support of such proposal or nomination. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least seventy (70) days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. (B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Bylaw, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case 4 may be) for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting, or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement or an adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above. (C) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the certificate of incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded. (2) For purposes of this Bylaw, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock to elect directors under specified circumstances. SECTION 1.13. Stockholder Action. Any action required or permitted to be taken by any stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders. Except as otherwise required by law, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors. SECTION 1.14. Inspectors of Election. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the 5 Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors' count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election. ARTICLE II Board of Directors SECTION 2.1. Number; Qualifications. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Directors need not be stockholders. SECTION 2.2. Election; Resignation; Removal; Vacancies. At the first annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect directors each of whom shall hold office for a term of one year or until his successor is elected and qualified. The number of directors constituting the initial Board of Directors shall be ten. Subject to the rights of holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors may be modified from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies. Any director may resign at any time upon written notice to the Corporation. Any newly created directorship or any vacancy occurring in the Board of Directors for any cause may be filled by a majority of the remaining members of the Board of Directors, although such majority is less than a quorum, or by a plurality of the votes cast at a meeting of stockholders, and each director so elected shall hold office until the expiration of the term of office of the director whom he has replaced or until his successor is elected and qualified. SECTION 2.3. Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine, and if so determined notices thereof need not be given. SECTION 2.4. Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the President, any Vice President, the Secretary, or by any member of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four hours before the special meeting. SECTION 2.5. Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Bylaw shall constitute presence in person at such meeting. 6 SECTION 2.6. Quorum; Vote Required for Action. At all meetings of the Board of Directors a majority of the whole Board of Directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. SECTION 2.7. Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his absence by the President, or in their absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting. SECTION 2.8. Informal Action by Directors. Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee. ARTICLE Ill Committees SECTION 3.1. Committees. The Board of Directors shall appoint the committees provided for in these Bylaws in Sections 3.2 and 3.3 and may, by resolution passed by the Board of Directors, designate one or more additional committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. SECTION 3.2. Compensation Committee. (a) At each annual meeting of the Board of Directors, the Board of Directors shall, by a resolution adopted by the Board of Directors, designate and appoint from its members a Compensation Committee consisting of three or more directors, each of whom shall be a "disinterested" person. (b) The Compensation Committee shall have the powers and responsibilities designated by the Board of Directors from time to time. (c) Action taken by the Compensation Committee or at meetings duly called shall require the affirmative vote of at least a majority of its members. 7 SECTION 3.3. Audit Committee. (a) At each annual meeting of the Board of Directors, the Board of Directors shall, by a resolution adopted by the Board of Directors, designate and appoint from its members an Audit Committee consisting of three or more directors, none of whom is an officer or employee of the Corporation. (b) The Audit Committee shall have the powers and responsibilities as designated by the Board of Directors from time to time. SECTION 3.4. Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to ARTICLE 11 of these Bylaws. ARTICLE IV Officers SECTION 4.1. Executive Officers; Election; Qualifications; Term of Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a President and Secretary, and it may, if it so determines, choose a Chairman of the Board from among its members. The Board of Directors may also choose one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his election, and until his successor is elected and qualified or until his earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation. Any number of offices may be held by the same person. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting. SECTION 4.2. Powers and Duties of Executive Officers. The officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors. SECTION 4.3. Chairman of the Board. The Chairman of the Board shall be a member of the Board of Directors. He shall preside at each meeting of the Board of Directors or the stockholders. Unless the Chairman also holds another office described in these Bylaws, he shall be a non-executive officer of the Corporation. SECTION 4.4. The President. The President shall be the chief executive officer of the Corporation. He shall, in the absence of the Chairman of the Board, preside at each meeting of the Board of Directors or the stockholders. The President shall be responsible for the general supervision and control of the business and affairs of the Corporation, subject to the direction of the Board of Directors. The 8 President may sign or countersign certificates, contracts, agreements and other documents and instruments in the name and on behalf of the Corporation, unless and except to the extent that any document or instrument is required by law or by the Board of Directors to be signed or countersigned by another officer of the Corporation. The President may appoint additional officers that are not executive officers described in these Bylaws (unless such appointments are approved by the Board of Directors), and such additional officers shall serve the Corporation at the discretion of the President. The President shall perform all duties incident to the office of the President, and such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 4.5. Executive Vice President. Each Executive Vice President shall perform all such duties as from time to time may be assigned to him by the Board of Directors or the President. At the request of the President or in his absence or in the event of his inability or refusal to act, the Executive Vice President, or if there shall be more than one, the Executive Vice Presidents in the order determined by the Board of Directors (or if there be no such determination, then the Executive Vice Presidents in the order of their appointment), shall perform the duties of the President, and when so acting, shall have the powers of and be subject to the restrictions placed upon the President in respect of the performance of such duties. SECTION 4.6. Senior Vice President. Each Senior Vice President shall perform all such duties as from time to time may be assigned to him by the Board of Directors or the President. Each Senior Vice President shall perform all duties incident to the office of such Senior Vice President, and such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 4.7. Chief Financial Officer. The Chief Financial Officer shall be responsible for the financial affairs of the Corporation and shall be the chief accounting officer for public securities purposes. If the Chief Financial Officer is not also the Treasurer of the Corporation, he shall be responsible for the supervision of the Treasurer. He shall perform all duties incident to the office of Chief Financial Officer, and such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 4.8. Treasurer. The Treasurer shall: (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation; (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (c) deposit all moneys and other valuables to the credit of the Corporation in such depositaries as may be designated by the Board of Directors or pursuant to its direction; (d) receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever; (e) disburse the funds of the Corporation and supervise the investments of its funds; (f) render to the Board of Directors, whenever the Board of Directors may require, an account of the financial condition of the Corporation; and 9 (g) in general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors. In the event that any officer of the Corporation other than the Treasurer shall be designated as the Corporation's chief financial officer, the Treasurer shall share the foregoing powers and duties with such chief financial officer, and all references in these Bylaws to the Treasurer shall be deemed to include such chief financial officer of the Corporation. SECTION 4.9. Secretary. The Secretary shall: (a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Board of Directors, the committees of the Board of Directors and the stockholders; (b) see that all notices are duly given in accordance with the provisions of these Bylaws and as required by law; (c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all certificates for shares of the Corporation and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; (d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and (e) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 4.10. Assistant Secretaries. During the absence or disability of the Secretary, the Assistant Secretary shall have and may exercise all of the powers and shall discharge all of the duties of the Secretary. Each Assistant Secretary shall also perform all such other duties as are incident to his office or are properly requested by the President, the Secretary or the Board of Directors. SECTION 4.11. Assistant Treasurers. During the absence or disability of the Treasurer, the Assistant Treasurer shall have and may exercise all of the powers and shall discharge all of the duties of the Treasurer. Each Assistant Treasurer shall also perform all such other duties as are incident to his office or are properly requested by the President, the Treasurer or the Board of Directors. SECTION 4.12. Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors. The Board of Directors may from time to time delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, for or without cause. 10 ARTICLE V Stock SECTION 5.1. Certificates. Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or the President or an Executive Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. SECTION 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. ARTICLE VI Miscellaneous SECTION 6.1. Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board of Directors. SECTION 6.2. Seal. The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. SECTION 6.3. Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice. SECTION 6.4. Manner of Notice. Except as otherwise provided herein, notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the Corporation. Notice to directors may be given by telegram, telecopier, telephone or other means of electronic transmission. SECTION 6.5. Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other 11 corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (i) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committeve in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. SECTION 6.6. Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. SECTION 6.7. Amendment of Bylaws. These Bylaws may be altered or repealed, and new bylaws made, by the Board of Directors, but the stockholders may make additional bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise. 12 EX-10 3 EXHIBIT 10.9.5 Exhibit 10.9.5 Mr Frederick Landman, PanAmSat Coporation One Pickwick Plaza - Suite 270 Greenwich, CT 06830 U.S.A. Evry, 9 March 1998 Re: PAS 6 Satellite (LSA 94.5.918 "Pas 6 LSA") This letter will confirm our agreement that, notwithstanding the terms of the Pas 6 LSA, PanAmSat agrees to [**************************** ******************************************************************************** ***********************************************************************] [******************************************************************************* ******************************************************************************** ************************************************] This letter formally constitutes an amendment to the PAS 6 LSA. In order to signify your approval, could you kindly return an executed original of this letter to my attention. Best Regards, Michele FRANCI ACKNOWLEDGED AND AGREED TO BY PANAMSAT [***] Filed separately with the Commission pursuant to a request for confidential treatment. 1 Annex A ARIANESPACE LETTERHEAD Mr Frederick Landman, PanAmSat Coporation One Pickwick Plaza - Suite 270 Greenwich, CT 06830 U.S.A. (DATE) Re: [********************************************] Dear Mr. Landman, [******************************************************************************* ******************************************************************************** ******************] Sincerely, ARIANESPACE S.A. By:__________________________________ Title:_________________________________ [***] Filed separately with the Commission pursuant to a request for confidential treatment. EX-10 4 EXHIBIT 10.15.5 Exhibit 10.15.5 PanAmSat /MultiLaunch Amdt 3/95.5.933 Confidential ARIANESPACE PROPRIETARY AMENDMENT#3 TO THE AGREEMENT FOR THE LAUNCHING INTO GEOSTATIONARY TRANSFER ORBIT OF PANAMSAT SATELLITES BY AN ARIANE LAUNCH VEHICLE 1 AMENDMENT #3 TO THE MULTI LAUNCH SERVICES AGREEMENT This Amendment 3 to the Multi Launch Services Agreement is entered into BY AND BETWEEN PanAmSat Corporation, hereinafter referred to as "Customer", a company organized under the laws of the State of Delaware, with principal offices located at One Pickwick Plaza, Greenwich CT, 06830 U.S.A. ON THE ONE HAND, AND ARIANESPACE, a company organized under the laws of France with principal offices located at Boulevard de l'Europe, Immeuble Ariane, 91000 EVRY, France, hereinafter referred to as "ARIANESPACE". ON THE OTHER HAND, 2 WHEREAS Customer has approached ARIANESPACE with a view to launching up to four (4) PanAmSat Satellites using an ARIANE Launch Vehicle, and WHEREAS ARIANESPACE has proposed to Customer either dedicated Launches, i.e. Launches by an ARIANE Launch Vehicle the only payload of which is Customer's Satellite, or Shared Launches, i.e. Launches by an ARIANE Launch Vehicle the payload of which is made up at the same time of Customer's Satellite and the satellites of Third Party Customer(s) of ARIANESPACE, and WHEREAS Customer has selected Shared Launches under the conditions set forth under this Agreement, being aware of the particular constraints involved in such a Launch, and WHEREAS Customer and ARIANESPACE, aware of the constraints involved in any Launch operation and of the complex nature of the technologies involved, have reached an agreement in accordance with the terms and conditions set forth in Agreement 95.5.933 entered into by the Parties on 20 December 1995 ("the Agreement"). WHEREAS the Parties have agreed to amend the Agreement in the manner set forth in this Amendment #3 to the Agreement which shall replace the initial Terms and Conditions of the Agreement and constitutes an amendment to the Agreement within the terms of its Paragraph 20.6. WHEREAS PanAmSat International Systems, Inc., formerly known as PanAmSat Corporation ("PanAmSat International") has contemporaneously with the execution of this amendment with ARIANESPACE's consent, assigned this Agreement to the new PanAmSat Corporation. NOW, THEREFORE, IT IS AGREED AS FOLLOWS : 3 CONTENTS PART I TERMS AND CONDITIONS Pages ARTICLE 1 DEFINITIONS..................................................9 ARTICLE 2 SUBJECT OF THE AGREEMENT.....................................17 ARTICLE 3 CONTRACTUAL DOCUMENTS........................................18 ARTICLE 4 ARIANESPACE'S SERVICES......................................19 ARTICLE 5 CUSTOMER TECHNICAL ..........................................25 ARTICLE 6 LAUNCH SCHEDULE ............................................26 ARTICLE 7 COORDINATION BETWEEN ARIANESPACE AND CUSTOMER................28 ARTICLE 8 REMUNERATION.................................................29 ARTICLE 9 PRICE ESCALATION FORMULA.....................................38 ARTICLE 10 PAYMENT SCHEDULE............................................41 ARTICLE 11 LAUNCH POSTPONEMENTS/ACCELERATION...........................51 ARTICLE 12 RIGHT OF OWNERSHIP AND CUSTODY..............................60 ARTICLE 13 REPLACEMENT LAUNCH..........................................61 ARTICLE 14 ALLOCATION OF POTENTIAL LIABILITIES AND RISKS...............66 ARTICLE 15 INSURANCE...................................................72 ARTICLE 16 OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION..............74 4 CONFIDENTIALITY/PUBLIC STATEMENTS......................................74 ARTICLE 17 PERMITS AND AUTHORIZATIONS - GROUND STATIONS................77 ARTICLE 18 TERMINATION BY CUSTOMER.....................................78 ARTICLE 19 TERMINATION BY ARIANESPACE..................................84 ARTICLE 20 MISCELLANEOUS...............................................85 ARTICLE 21 APPLICABLE LAW..............................................89 ARTICLE 22 ARBITRATION.................................................90 ARTICLE 23 EFFECTIVE DATE..............................................91 PART II A N N E X E S ANNEX 1 LAUNCH SPECIFICATIONS ANNEX 2 ARIANESPACE TECHNICAL COMMITMENTS ANNEX 3 CUSTOMER'S TECHNICAL COMMITMENTS ANNEX 4 LAUNCH RISK GUARANTEE ANNEX 5 ESA - ARIANESPACE CONVENTION (EXTRACT) 5 P A R T I T E R M S A N D C O N D I T I O N S 6 ARTICLE 1 DEFINITIONS In this Agreement the terms set forth hereafter shall have the meaning given in this Article: Agreement means this Agreement as defined in Article 3 of this document, as amended at the date hereof, including, without limitation, this Amendment #3. Ancillary Equipment means all equipment, devices and software to be provided by Customer on the Launch Base in order to make Satellite ready for Launch. Associated Service(s) means those supplementary launch services defined in Sub-paragraphs 4.2.2. and 4.2.3. of Article 4 of this Agreement. Associates means all individuals or legal entities, organized under public or private law, who shall act, directly or indirectly, on behalf or at the direction of either Party to this Agreement or of the Third Party Customer(s) of ARIANESPACE to fulfill the obligations undertaken by such Party in this Agreement, or by the Third Party Customer(s) of ARIANESPACE including, without limitation, the employees of each of the Parties, or of the Third Party Customer(s) of ARIANESPACE, their suppliers and subcontractors at any tiers. Base Rate means the Chase Manhattan Bank (N.Y.) prime rate plus one (1) percentage point for any amount expressed in U.S. dollars, or the Taux de base bancaire of Credit Lyonnais (Paris) plus one (1) percentage point for any amount expressed in French Francs, or the yield at maturity of short term ECU denominated bonds as published weekly on Wednesday by the Luxembourg Stock Exchange plus one (1) point for any amount expressed in ECU. Cash Option means, only in the event an Ariane 4 Launch Vehicle is designated to perform the Launch Services, the option provided to Customer to receive a payment from ARIANESPACE subject to the conditions specified in Sub-paragraph 4.6.2. of Article 4. Combined Space Vehicle means the Launch Vehicle, and/or the Satellite, and/or the satellite of any Third Party Customer(s) of ARIANESPACE, and/or their components. Commercial Insurance Market means the providers of insurance or reinsurance for first party space-related risks on a regular basis that are not affiliated with or controlled directly or indirectly by Customer. Deviation means non compliance with the specifications included in the D.C.I. (Document de Controle des Interfaces / Interface Control Document, including its reference documents, applicable documents and annexes) of: a) the performance of the various systems of the Launch Vehicle; and/or the environmental conditions to which the Satellite was subjected during the period from the 7 instant when the Launch occurred until the instant when the activation of either the propulsion and/or orientation systems of the Satellite should have occurred; and/or b) the behavior of the Satellite of (a) Third Party Customer(s) of ARIANESPACE from the instant when the Launch occurred until the earlier of the following: -the instant when the propulsion and/or orientation systems of the satellite of the Third party Customer(s) of ARIANESPACE are activated, or -the instant when the activation of either the propulsion and/or orientation systems of the Satellite should have occurred. Double Launch means a Launch with two satellites including the Satellite supplied by Customer. Elected Amount means an amount comprised between Thirty Million European Currency Units (ECU30,000,000) and Eighty Five Million European Currency Units (ECU85,000,000) elected by Customer when exercising the Relaunch Credit Option or the Cash Option. Events of Force Majeure means events such as but not limited to explosions, fires, earthquakes, floods, bad weather and other Acts of God, wars, whether or not declared, social uprisings, strikes, lock-outs and other labor problems, governmental or administrative measures, and all other events beyond the reasonable control of either Party or its Associates that impede the execution of the obligations of either Party or its Associates and, including, but without limitation, the accomplishment of the Launch within the Launch Period, Slot, Day, Window or at Launch Time, provided such difficulties may not be overcome using efforts which may reasonably be expected of the Party affected and/or its Associates under the circumstances. Guarantee Amount means an amount in European Currency Units (ECU's) determined as follows: 0.7 ECU x LSP $ Where LSP means the Launch Services Price determined under Paragraph 8.1.1. of this Agreement, without taking into consideration the ECU/$ exchange rate. For example, the Guarantee Amount for the Launch Services Price of the Firm Launch #1 as set forth under Paragraph 8.1.1.A) shall be [**************] Interested Party (ies) in the Launch means any individual or legal entity governed by private or public law, that has commissioned ARIANESPACE to proceed with the Launch, or has any interest including without limitation a legal interest in the Launch Vehicle. For the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 8 purpose of Article 14 of the Agreement,Interested Party(ies) in the Launch shall be deemed ARIANESPACE Associates. Interested Party(ies) in the Satellite means any individual or legal entity governed by private or public law, that has commissioned Customer to proceed with the Launch, or has any interest including without limitation a legal interest in the Satellite to be so launched, including without limitation, insurers, any person or entity to whom Customer has sold or leased, directly or indirectly, or otherwise agreed to provide any portion of the Satellite or Satellite service. For the purpose of Article 14 of this Agreement, Interested Party(ies) in the Satellite shall be deemed Customer's Associates. Interested Party(ies) in the satellite of the Third Party Customer(s) of ARIANESPACE means any individual or legal entity that has commissioned the Third Party Customer(s) of ARIANESPACE to proceed with the Launch or has any interest including without limitation legal interest in this satellite to be so launched, including without limitation, insurers, any person or entity to whom Third Party Customer(s) of ARIANESPACE has sold or leased, directly or indirectly, or otherwise agreed to provide any portion of the satellite or satellite services. For the purpose of Article 14 of this Agreement, Interested Party(ies) in the satellite of the Third Party Customer(s) of ARIANESPACE shall be deemed Third Party Customer(s) of ARIANESPACE's Associates. 9 L means the first day of the most recently agreed Launch Period or Launch Slot (except for construing Articles 10 and 13.2.2 of this Agreement where, subject to Paragraph 11.4. of this Agreement, L refers to the first day of the initial Launch Period). Notwithstanding the foregoing, in the case of Optional Launch #1 and Optional Launch #2, for the purpose of the application of Article 10 to the initial Launch Period, L shall mean the first day of the three month Launch Period defined pursuant to Paragraph 6.2 for all payments due further to such narrowing of the initial Launch Period. Launch or Launching means the ignition of the 1st stage engine(s) (Viking engines on Ariane 4 - Vulcain engine on Ariane 5) of the Launch Vehicle that has been integrated with the Satellite supplied by Customer and with other satellite(s) supplied by (a) Third Party Customer(s) of ARIANESPACE, if said ignition is followed by (i) opening of the table clamps with consequent release of the said Launch Vehicle for an Ariane 4 Launch Vehicle; or (ii) the order of ignition of solid propellant booster(s) for an Ariane 5 Launch Vehicle. Launch Abort means the launch operations of the Launch Vehicle that has been integrated with the Satellite supplied by Customer and with other satellite(s) supplied by (a) Third Party Customer(s) of ARIANESPACE up to the ignition of first stage engine(s) of the Launch Vehicle (Viking engines on Ariane 4 - Vulcain engine on Ariane 5) without the Launch occurring. Launch Base means the ARIANE launch base in Kourou, French Guiana, including all its facilities and equipment. Launch Day or Day means a calendar day (established for the Launch pursuant to this Agreement) within the Launch Slot during which the Launch Window is open. Launch Failure means that: a) the Satellite is destroyd or lost during the period extending from the instant when the Launch occurred and the instant when the Satellite is separated from the Launch Vehicle, or if such Satellite cannot be separated from the Launch Vehicle; or b) the occurrence, due to Deviation of a reduction, expressed in percentage, of more than LFF of the operational capability of the Satellite for Customer's intended communication purposes, using reasonable business judgment. 10 LFF (Launch Failure Factor) means FIFTY PERCENT (50%), unless Customer procures on the Commercial Insurance Market a policy of launch insurance applying the Loss Quantum for the relevant Satellite, in which case LFF shall mean the percentage specified in that insurance policy to define a constructive total loss providing for the payment of the full amount of insurance. Said reduction of the operational capability shall be determined by using the Loss Quantum. Launch Opportunity means the availability to Customer of a Satellite position within a Launch Period or Launch Slot for a Launch on a Launch Vehicle on which the other allocated satellite(s) have a launch mission and a satellite mission compatible with that of Customer(s)' Satellite(s) in accordance with Annex 1 to this Agreement. This availability is linked to the time required to complete the mission analysis studies and to select the Launch Vehicle/Satellite configuration. Launch Period or Period means a period of (3) three consecutive calendar months, except in the case of Optional Launch #1 and Optional Launch #2, for which the initial Launch Periods shall extend over a six month period. Launch Possibility means a position for Customer's Satellite, made available by ARIANESPACE (if necessary) postponing the launch of another satellite, on the next scheduled launch within a Launch Period or Launch Slot, whose other allocated satellite(s) have a launch mission, launch window, frequency, mass, volume and satellite mission compatible with those of Customer's Satellite in accordance with Annex 1. The availability of such a position is conditioned upon there being sufficient time after the date of any request for postponement of the Launch to have the mission analysis and the adaptation of the Launch/payload interfaces carried out. Launch Rank means the chronological position of the Satellite in order of the satellites to be launched by ARIANESPACE fixed by reference to the Launch Period or Launch Slot allocated to Customer's Satellite (as the same may from time to time be postponed) pursuant to the Agreement and by reference to the Launch Period or Launch Slot allocated to the satellites of other clients of ARIANESPACE (as the same may from time to time be postponed) pursuant to the agreements between ARIANESPACE and other clients. Launch Services means the services to be provided by ARIANESPACE as defined in (i) Paragraphs 1 and 4 of Annex 2 to this Agreement and (ii) Paragraph 4.5. hereof. or if the Relaunch Credit Option or the Cash Option is exercised and maintained (iii) Paragraph 4.6. hereof. Launch Services Price means the price indicated under Paragraph 8.1.1. for the relevant Launch including the discounts or escalators, if any. Launch Slot or Slot means a period of one calendar month within a Launch Period with daily Launch Window possibilities. 11 Launch System means the launch assembly complex consisting of the ARIANE Launch Vehicle, the Launch Base (ELA), and the Payload Preparation Assembly (EPCU). Launch Time means the instant, within the Launch Window, that the ignition of the first stage engines is scheduled to take place, defined in hours, minutes and seconds (GMT Universal Time). The initial Launch Time occurs at the first second of the opening of the Launch Window. Launch Vehicle means the vehicle belonging to the ARIANE family chosen by ARIANESPACE to perform the Launch. Launch Vehicle Mission or Launch Mission means the mission assigned to the ARIANE Launch Vehicle as defined in Annex 1 to this Agreement. Launch Window means a time period as defined in Annex 1 to this Agreement. Loss Quantum means the degradation factor of the Satellite resulting from the application of determination mode as mutually agreed in good faith by the Parties on or prior to L minus (-) THREE (3) months based on a Customer's written proposal; provided, that, if Customer has taken out, either in insurance or in reinsurance, on the Commercial Insurance Market for at least EIGHTY PER CENT (80%) of the amount insured, one or more policy(ies) of launch insurance, the determination mode of the loss quantum provided for in the insurance policy with the higher cover, as delivered by Customer to ARIANESPACE on or prior to L (-) minus THREE (3) months, shall apply. If a different determination mode is further agreed with the Commercial Insurance Market, for that policy with higher cover, this new determination mode shall consequently apply; it being understood that Customer shall promptly inform ARIANESPACE, and in any event before the Launch has occurred of any change. Optional Launch means a Launch ordered by Customer as the result of the exercise of a Launch Option. Partial Failure means the occurrence due to a Deviation of a reduction of more than a percentage defined as PFF but not more than LFF of the operational capability of the Satellite for Customer's intended communication purposes, using reasonable business judgment. 12 PFF (Partial Failure Factor) means TWENTY PERCENT (20%), unless Customer procures on the Commercial Insurance Market a policy of launch insurance applying the Loss Quantum for the relevant Satellite in which case PFF shall mean the percentage specified in that insurance policy to define the deductible applicable for a partial loss. Said reduction of the operational capability shall be determined by using the Loss Quantum. Party or Parties means Customer or ARIANESPACE or both according to the context. Payload Preparation Complex (Ensemble de Preparation Charges Utiles "EPCU") means the complex composed of various facilities and equipment located in Kourou, French Guiana, that is to be used by Customer for the preparation of the Satellite for Launch. [******************************************************************************* **********] Postlaunch Services means (i) the reports and range services as defined in Paragraphs 1, 2, 3, and 4 of Annex 2 to this Agreement that are to be provided to Customer by ARIANESPACE after the Launch and (ii) the services provided for in Paragraph 4.5. hereof or if the Relaunch Credit Option or the Cash Option is exercised and maintained (iii) Paragraph 4.6. hereof. Property means the property that ARIANESPACE, and/or Customer, and/or their respective Associates, and/or Third Party Customer(s) of ARIANESPACE, and/or its(their) Associates, according to the context in which this term is used hereunder, use(s) in connection with the performance of this Agreement or/and any other agreements which may directly or indirectly have any effect on the fulfillment of the obligations undertaken by the Parties including without limitation, agreements entered into between ARIANESPACE and the Third Party Customer(s) of ARIANESPACE. This Property shall also include the Property of ARIANESPACE and the Property of Customer. Property of ARIANESPACE means, for purposes of this Agreement, all tangible property which ARIANESPACE shall use in connection with the Launch, or shall place at Customer's disposal for this purpose, including without limitation the Launch Vehicle and the Launch Base. Property of Customer means, for purposes of this Agreement, all property which Customer shall use for the Launch and the interface test(s), including in particular, but without limitation, the Satellite and its Ancillary Equipment. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 13 Reflight means, only in the case when the previous Launch has been performed on an Ariane 5 Launch Vehicle, a Replacement Launch under Paragraph 4.5. of Article 4 of this Agreement. Relaunch Credit Option means, only in the event of an Ariane 4 Launch Vehicle is designated to perform the Launch Services, the option provided to Customer for (i) a credit on the price of a Replacement Launch if the Launch Mission results in a Launch Failure, or (ii) a payment if the Launch Mission results in a Partial Failure, as determined under Sub-paragraph 4.6.1 of Article 4 to this Agreement subject to the conditions specified therein. Replacement Launch means a Launch which, subject to the best efforts of ARIANESPACE, follows a previous Launch when, for any reason whatsoever, the Launch Vehicle Mission or the Satellite Mission of the previous launch has not been accomplished. Satellite (Spacecraft in Annexes 1, 2, and 3) means a space vehicle supplied by Customer that is compatible with the Launch Vehicle and the Launch Vehicle Mission, and meets the specifications set forth in Annex 1 to this Agreement. Satellite Mission means the mission assigned to the Satellite by Customer after separation from the ARIANE Launch Vehicle. Services means any and all services to be provided by ARIANESPACE under this Agreement. Shared Launch means a Launch with more than two satellites, including the Satellite supplied by Customer. Third Party means any individual or legal entity other than the Associates, a Third Party Customer(s) of ARIANESPACE, the Interested Party(ies) or the Parties. Third Party Customer(s) of ARIANESPACE means other Customer(s) of ARIANESPACE that use(s) ARIANESPACE's launch services for the same Launch. 14 ARTICLE 2 SUBJECT OF THE AGREEMENT 2.1. The subject of this Agreement is the Launch of up to four Satellites supplied by Customer at the Launch Base for the purpose of accomplishing the Launch Mission in accordance with the terms and conditions of this Agreement. 2.2. Any Replacement Launch other than a Reflight shall form the subject of a separate Launch Services agreement drawn up in accordance with the provisions of Article 13 of this Agreement. 2.3. The Parties agree to negotiate in good faith, if needed, additional Launches to be covered under this Agreement to meet Customer's needs in excess of the Launches covered under this Agreement. 15 ARTICLE 3 CONTRACTUAL DOCUMENTS 3.1. This Agreement consists of the following documents which are contractually binding between the Parties : 1. Terms and Conditions 2. Launch Specifications 3. ARIANESPACE Technical Commitments 4. Customer's Technical Commitments 5. ESA-ARIANESPACE Convention (Extract) (Annex 4) 3.2. Terms and Conditions shall prevail over the Annexes. There is no order of precedence among the Annexes. 16 ARTICLE 4 ARIANESPACE'S SERVICES 4.1. ARIANESPACE undertakes to use its best efforts to perform the Services specified in this Agreement. 4.2. ARIANESPACE's commitments under this Agreement cover : 4.2.1. Launch Services, ARIANESPACE shall notify Customer in writing as to the type of Launch Vehicle (i.e. Ariane 4 or Ariane 5) chosen for the Launch on or prior to L- 4 months. 4.2.2. Associated Service(s) ordered by the Customer as set forth in the present Agreement and as defined in Annex 2, Paragraph 2, under the heading "General Range Support Provided by ARIANESPACE and Additional Options Ordered by the Customer" in accordance with the conditions as specified therein. 4.2.3. Subject to additional order(s) of the Customer, one or more Service(s) as set forth in (i) Paragraph 3 of Annex 2 to this Agreement, under the heading "Additional Options Available to the Customer"; and/or (ii) the latest issue of the User's Manual (M.U.A.) as at the date of such additional order(s) of the Customer, in accordance with the then applicable conditions, as well as any other service(s) requested by Customer provided that such order for the said other services is accepted by ARIANESPACE. 4.3. Launch Services for each Launch, to the exception of Postlaunch Services, shall be deemed to be accomplished by ARIANESPACE once the Launch has taken place, ARIANESPACE having no control of the Launch Vehicle after the Launch. In the event that, for any reason whatsoever, a Launch Abort occurs, ARIANESPACE shall postpone the Launch in accordance with the conditions set forth in Article 11 of this Agreement. 17 4.4. ARIANESPACE hereby grants to Customer the following option rights: Customer shall have the right to exercise a Launch Option for Optional Launch #1 and Optional Launch #2 respectively no later than eighteen (18) months prior to the initial Launch Period of the Optional Launch concerned. In the absence of exercise of such Launch Option at L-18 months, the nominal Launch Period shall be postponed for period(s) of six months until exercise, provided that the Launch Options may not be exercised later than the following dates: i) for Optional Launch #1: 30 June 1999 ii) for Optional Launch #2: 31 December 1999 18 Upon exercise of a Launch Option, unless otherwise agreed by the Parties at that time, the then current nominal Launch Period for the Launch for which the option is exercised shall be deemed to be the `initial Launch Period'. If the Parties so agree, an initial Launch Period may begin earlier or later than the nominal Launch Period. Any Launch Option under this Paragraph 4.4. may not be exercised by Customer later than the dates set forth hereabove. Upon exercise of the corresponding Launch Option, Customer shall inform ARIANESPACE of the baseline mass selected between i) 3450 kg and ii) 4500 kg (all masses without adaptor). Further Optional Launches may be added to the Launches covered under this Agreement as set forth under Paragraph 2.3. 4.5. Should the Launch be performed on an Ariane 5 Launch Vehicle and the Launch Mission result in a: 4.5.1. Launch Failure, ARIANESPACE shall perform a Reflight in accordance with the provisions of this Agreement, provided that no further payment by Customer to ARIANESPACE shall be due for the provision of: (i) Launch Services for the Launch of a replacement Satellite on condition that the maximum mass of such Satellite is equal to the mass of the initial Satellite, and (ii) such Associated Services as are retained by Customer as of the date of execution of this Agreement, except as provided for in Paragraph 8.1.4. of Article 8 of this Agreement, in case of postponement. Customer may order additional mass and/or Associated Services for additional cost under the conditions specified under Article 13 hereof for a Replacement Launch. 4.5.2. Partial Failure, ARIANESPACE shall pay to Customer an amount as determined by multiplying the Guarantee Amount by the Loss Quantum. The resulting amount will be subject to a deductible equal to PFF of the Guarantee Amount provided for the Launch, in accordance with the following formula: (Guarantee Amount x Loss Quantum) minus deductible. 19 Notwithstanding the foregoing, if the insurance policy taken out by Customer (i) provides for a deductible higher or lower than PFF, such deductible as provided for in the said insurance policy shall apply, or (ii) does not provide for a deductible, no deductible shall apply. 4.6 Customer shall have the right to exercise the Relaunch Credit Option or the Cash Option within thirty (30) days following receipt of the written notice from ARIANESPACE stating that the Launch Vehicle selected for the Launch is an Ariane 4. Customer written notice shall specify which option is exercised and which Elected Amount is elected. 4.6.1. Should the Relaunch Credit option be exercised and maintained ARIANESPACE shall, if the Ariane 4 Launch result in a: (i) Launch Failure, credit to Customer an amount equal to the Elected Amount to be applied as partial payment of the Launch Services Price for the Replacement Launch, or (ii) Partial Failure, pay to Customer an amount as determined pursuant to Subparagraph 4.5.2. above except that the Guarantee Amount shall be replaced by the Elected Amount. 4.6.2. Should the Cash Option be exercised and maintained, ARIANESPACE shall, if the Ariane 4 Launch results in a: (i) Launch Failure, pay to Customer an amount equal to the Elected Amount, or (ii) Partial Failure, pay to Customer an amount as determined pursuant to Subparagraph 4.5.2. above except that the Guarantee Amount shall be replaced by the Elected Amount 20 4.7. There shall not be any cover for Launch Failure or Partial Failure and consequently the provisions of Paragraphs 4.5. and 4.6. of Article 4 hereof shall not apply, in any of the following cases: 4.7.1. If Customer does not notify in writing ARIANESPACE of any event that would entitle Customer to any right under Paragraphs 4.5 and 4.6. of Article 4 of this Agreement before the first to occur of any of the THREE (3) following events; (i) the day the Satellite is put into commercial operation, (ii) the SIXTIETH (60th) day following the date of station acquisition of the Satellite, (iii) the NINETIETH (90th) day at zero hour following the date of the Launch. Notwithstanding the foregoing, an extension of the periods hereabove might be obtained upon request from Customer if both of the following conditions occur: (a) the launching does not conform to the specifications of the D.C.I. and the Satellite reached its final positioning such that it cannot be determined that a Launch Failure or Partial Failure has occurred and; (b) Customer's request for extension is received before the first of the THREE (3) events specified above. In no event shall such extension extend beyond the ONE HUNDRED AND EIGHTIETH (180th) day following the date of the Launch. and/or 21 4.7.2. If the Launch Failure or the Partial Failure is caused by, or results from one or more of the following events A - War, hostile or warlike action in time of peace or war, including action in hindering, combating or defending against an actual, impending or expected attack by (a) any government or sovereign power (de jure or de facto), or (b) any authority maintaining or using a military, naval or air force, or (c) a military, naval or air force, or (d) any agent of any such government, power, authority or force; B - any anti-satellite device, or device employing atomic or nuclear fission and/or fusion, or device employing laser or directed energy beams; C - insurrection, strikes, riots, civil commotion, rebellion, revolution, civil war, usurpation or action taken by a government authority in hindering, combating or defending against such an occurrence whether there be a declaration of war or not; D confiscation by order of any government or governmental authority or agent (whether secret or otherwise), or public authority; E nuclear reaction, nuclear radiation, or radioactive contamination of any nature, whether such loss or damage be direct or indirect, except for radiation naturally occurring in the space environment; F - willful or intentional acts of Customer designed to cause loss or failure of the Satellite; G - electromagnetic or radio frequency interference, except for physical damage to the Satellite resulting from such interference and except for interference naturally occurring in the space environment. 22 ARTICLE 5 CUSTOMER TECHNICAL COMMITMENTS 5.1. Customer undertakes to fulfill the Technical Commitments set forth in Annexes 1 and 3 to this Agreement, and in particular to provide the Satellites at the Launch Base within time limits that are consistent with the Launch schedule set forth in this Agreement. 5.2. Customer shall notify ARIANESPACE on a timely basis of any event likely to impact on the Launch schedule of the Satellite to be Launched under this Agreement or that may result in a termination of the Launch under this Agreement. 5.3. At L-18 months of each Launch, Customer undertakes to inform ARIANESPACE of the applicable technical specifications for the relevant Satellite and the intended use of such Satellite. Subject to applicable technical constraints, the choice of which Satellite to be Launched may be changed by Customer, but the initial selection shall remain valid for the application of Paragraph 18.3 of Article 18 of this Agreement. 23 ARTICLE 6 LAUNCH SCHEDULE 6.1. The Launch of the Satellite(s) shall take place during the following Launch Period(s) : A) Firm Launch #1: The initial Launch Period was 1 July 1997 up to and including 30 September 1997. By mutual agreement, the Parties have agreed to redefine the Launch Period as extending from September 1st, 1998 up to and including October 31st, 1998 ("Redifined Launch Period"). B) Firm Launch #2: 15 May 1999 up to and including 15 August 1999. C) Optional Launch #1: The nominal Launch Period shall be:1 January 2000 up to and including 30 June 2000. D) Optional Launch #2: The nominal Launch Period shall be:1 January 2001 up to and including 30 June 2001. 24 In the case of Optional Launch #1 and Optional Launch #2, a three month Launch Period within the six month Launch Period shall be determined upon exercise of the corresponding Launch Option. 6.2. The Launch Slot within the Launch Period shall be determined by mutual agreement of the Parties no later than twelve and a half (12 1/2) months prior to the first day of the Launch Period, taking into account the available Launch Opportunities and the Satellite Construction and delivery schedule. Notwithstanding the foregoing, the Launch Slot within the Redefined Launch Period for the Firm Launch 1 shall be determined by mutual agreement of the Parties no later than January 31st, 1998 taking into account the available Launch Opportunities and the Satellite Construction and delivery schedule. Customer may request no later than January 31st, 1998 an acceleration of the Firm Launch 1 to August 1998 and ARIANESPACE will accept such acceleration provided that there is a Launch Opportunity in August 1998. 6.3. The Launch Day within the Launch Slot shall be determined, no later than four and a half (4 1/2) months prior to the first day of the Launch Slot, by mutual agreement of the Parties, based on a proposal made by ARIANESPACE. 6.4. The Launch Window set forth in Paragraph 1.6 of Annex 1 to this Agreement shall be determined, no later than the Final Mission Analysis Review, by mutual agreement of the Parties, based on a proposal made by ARIANESPACE. 6.5. In the event that, for any reason whatsoever, the Parties fail to agree upon the Launch Slot within the Launch Period, the Launch Day, or the Launch Window, ARIANESPACE shall determine said Launch Slot, Launch Day, or Launch Window taking into account the available Launch Opportunities, and the requirements and respective interests of Customer and of the Third Party Customer(s) of ARIANESPACE provided that ARIANESPACE shall notify the Customer of each applicable date not later than ten (10) days after the last day specified for selection under paragraph 6.2. or 6.3 above as applicable. 25 ARTICLE 7 COORDINATION BETWEEN ARIANESPACE AND CUSTOMER 7.1. Customer and ARIANESPACE shall each designate a project coordinator (Mission Manager) no later than two (2) months following the effective date of this Agreement. 7.2. The task of the project coordinators shall be to supervise and to coordinate the performance of the Services and of the respective Technical Commitments of the Parties within the Launch schedule set forth in this Agreement. 7.3. The project coordinators shall be endowed upon their appointment by each of the Parties with sufficient powers to enable them to settle any technical questions that may arise during the performance of this Agreement, as well as any other questions arising from its day-to-day management. 7.4. Either Party may replace its project coordinator (Mission Manager) by informing the other Party in writing of such action and indicating the effective date of designation. Such notification shall be signed by an official of the respective Party who is authorized to amend this Agreement, and shall become part of this Agreement when received by the other Party. 26 ARTICLE 8 REMUNERATION 8.1. 8.1.1. The remuneration of ARIANESPACE for the provision of Launch Services and the Associated Services included in the Launch Services Price as specified in Annex 2 to this Agreement for the Launch of a Satellite of the individual masses specified hereafter (without adaptor) are prices defined as follows: A) For Firm Launch #1: [******************************************************************* ********************] for a mass of 3450 kg. B) For Firm Launch #2: [******************************************************************* ********************] for a mass of 4500 kg. C) For Optional Launch #1 and Optional Launch #2: i) if Customer selects a baseline mass of 3450 kg.: [*************** *****************************************************] The price under this Subparagraph C)i) is valid for a Launch to take place prior to 1 April 1998 and for Launches beyond this date this price shall be increased by application of the escalation formula contained in Article 9 of this Agreement to the Launch Services Price from 1 October 1996 up to and including the date that is L-18 months of the initial Launch Period as determined at the date of exercise of the relevant Launch Option. Notwithstanding the foregoing, the application of the escalation formula under this subparagraph i) shall be capped to an increase of the price of [*] per the number of quarters or portion thereof over the period considered. OR [***] Filed separately with the Commission pursuant to a request for confidential treatment. 27 ii) if Customer selects a baseline mass of 4500 kg.: [*************** *************************************************************], or The price under this Subparagraph C)ii) is valid for a Launch to take place prior to 1 April 1999, for Launches beyond this date, this price shall be increased by application of the escalation formula contained in Article 9 of this Agreement to the Launch Services Price from 1 October 1997 up to and including the date that is L-18 months of the initial Launch Period as determined at the date of exercise of the relevant Launch Option. Notwithstanding the foregoing, the application of the escalation formula under this subparagraph ii) shall be capped to an increase of the price of [*] per the number of quarters or portion thereof over the period considered. D) The Launch Services Prices stated under Paragraphs A), B), and C) under Subparagraph 13.2.2. hereafter above shall be subject to a price reduction as follows: i) For Firm Launch #1: [********************************************************************* ********************] ii) For Firm Launch #2: [******************************************************************* ********************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 28 iii) For Optional Launch #1: a) if the Launch Option is exercised on or prior to 1 July 1998: [*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as increased for the initial Launch Period of Optional Launch #1), as applicable, or b) if the Launch Option is exercised after 1 July 1998: [*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as increased for the initial Launch Period of Optional Launch #1), as applicable. iv) For Optional Launch #2: a) if Optional Launch #1 has been exercised or a Replacement Lauch has been ordered on or prior to 1 July 1998, at the date of exercise of Optional Launch #2 and provided Optional Launch is exercised on or prior to 1 July 1999: the percentage applicable to Optional Launch #1 under Subparagraph iii) above or, if applicable to the Replacement Launch, plus [*] times the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) as applicable (as increased for the initial Launch Period of Optional Launch #2), or b) in all other cases: [*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as applicable and as increased for the initial Launch Period of Optional Launch #2). [***] Filed separately with the Commission pursuant to a request for confidential treatment. 29 v) For Replacement Launches ordered under this Agreement: Provided that the Replacement Launch is ordered no later than 31 December 2001, the percentage applicable to the last Launch ordered under this Agreement (including Replacement Launches) plus [*] times the applicable Launch Services Price under Article 13. Further, if a Replacement Launch is ordered on or prior to 1 July 1998, any further option(s) exercised hereunder shall be subject to a price reduction determined under Subparagraph 8.1.1.D)iv) above. The price reduction as calculated under this Sub-paragraph 8.1.1.D) shall be deducted from the payment due at L-9 months and, if the price reduction exceeds this payment, the excess price reduction shall be deducted equally from the payments at L-8 months and at L-10 months under Paragraph 10.1.1. A), B) or C) as applicable. Furthermore, notwithstanding the foregoing, in the event a Launch ordered under this Agreement is terminated, the Price Reduction of the other Launches ordered shall be recalculated to take into account such termination. Notwithstanding the foregoing, the price reduction under this Sub-paragraph 8.1.1.D) may not in any case exceed [*] of the relevant Launch Services Price under Paragraph 10.1.1A), B) or C) for any Launches under this Agreement 8.1.2 The applicable amount mentioned in the above Sub-paragraph 8.1.1. shall be increased in a firm fixed amount as follows: A) For all Launches under this Agreement not covered under Subparagraph 8.1.2.B): (i) The amount in European Currency Units obtained by multiplying the Elected Amount by [*******************************], if Customer exercises the Relaunch Credit Option, or (ii) The amount in European Currency Units obtained by multiplying the Elected Amount by [****************], if Customer exercises the Cash Option [***] Filed separately with the Commission pursuant to a request for confidential treatment. 30 B) For Launches (i) whose initial Launch Period is beyond 1 January 2000, or (ii) Launches postponed by Customer beyond 1 January 2000 under Paragraph 11.2.1. unless an option under this Subparagraph 8.1.2. was already exercised and the postponement does not postpone the Launch Period beyond 1 April 2000 and, ARIANESPACE shall use its best efforts to offer to Customer a Launch Risk Guarantee or similar coverage comparable to the Relaunch Credit option or the Cash Option under this Agreement. Such coverage shall be offered at the then applicable conditions. Should eventually the Ariane 5 Launch Vehicle be selected by ARIANESPACE to perform the Launch or should the Launch Period fall beyond the period of coverage provided in Subparagraph B) above, ARIANESPACE shall refund such amount within THIRTY (30) days of receipt by Customer of the corresponding written notice from ARIANESPACE with consequent cancellation of the option exercised. 8.1.3. A) For Firm Launch #1 and for Optional Launches #1 and #2 if Customer has selected a mass of 3450 kg: Up to L-12 months of the Launch, Customer may increase or decrease the Satellite mass referred to under Paragraph 8.1.1. by up to one hundred fifty kilograms (150 kg.). Customer undertakes to inform ARIANESPACE as soon as possible of any Satellite mass increase or decrease from the Satellite mass stated in Paragraph 8.1.1. hereabove. 31 Any increase or decrease in mass, as provided for in this Paragraph A) above shall be subject to a price variation in the remuneration stated above in Subparagraph 8.1.1., up or down depending on whether it is an increase or decrease or mass, as follows: i) from 0 kilogram to 50 kilograms: [**************] ii) from 51 kilograms to 150 kilograms: [************* *********] iii) Notwithstanding subparagraphs i) and ii), if the Launch is performed by way of a dedicated Ariane 4 Launch Vehicle, ARIANESPACE shall notify Customer at L-3 months of any available extra mass on the Launch Vehicle concerned in excess of the contractual mass defined under the terms of this Article 8 at such time. Customer shall then have the right within ten days of such notification to increase the Satellite mass by such available extra mass [**************************] Failing response during such period, Customer shall be deemed to have refused this additional mass. iv) Notwithstanding subparagraphs i) and ii), if the Launch is performed by way of an Ariane 5 Launch Vehicle or a Shared Ariane 4 Launch Vehicle, ARIANESPACE shall notify Customer at L-3 months of any available extra mass on the Launch Vehicle concerned. Such available extra mass shall be shared with the Third Party Customer(s) of ARIANESPACE on a pro rata basis of the of the respective masses of the Satellite and the satellite(s) of the Third Party Customer(s) of ARIANESPACE. Customer shall then have the right within ten days of such notification to increase the Satellite mass by such available extra mass for the Satellite [**************************]. Failing response during such period, Customer shall be deemed to have refused this additional mass. The above prices are firm and fixed prices and apply for each additional kilogram or fraction of a kilogram the Satellite mass is increased or decreased. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 32 B) For Firm Launch #2, and for Optional Launches #1 and #2 only if Customer has selected a mass of 4500 kg for the relevant Launch: Up to L-12 months of the Launch, Customer may increase or decrease the Satellite mass referred to under Paragraph 8.1.1. by up to two hundred kilograms (200 kg.). Customer undertakes to inform ARIANESPACE as soon as possible of any Satellite mass increase or decrease from the Satellite mass stated in Paragraph 8.1.1. hereabove. Any increase in mass, as provided for in this Paragraph B) shall be subject to a price increase in the remuneration stated above in Subparagraph 8.1.1., as follows: i) from 0 kilogram to 50 kilograms: [*****************] ii) from 51 kilograms to 200 kilograms: [********************] iii) Notwithstanding subparagraphs i) and ii), if the Launch is performed by way of a dedicated Ariane 4 Launch Vehicle, ARIANESPACE shall notify Customer at L-3 months of any available extra mass on the Launch Vehicle concerned in excess of the contractual mass defined under the terms of this Article 8 at such time. Customer shall then have the right within ten days of such notification to increase the Satellite mass by such available extra mass [************************]. Failing response during such period, Customer shall be deemed to have refused this additional mass. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 33 iv) Notwithstanding subparagraphs i) and ii), if the Launch is performed by way of an Ariane 5 Launch Vehicle or a Shared Ariane 4 Launch Vehicle, ARIANESPACE shall notify Customer at L-3 months of any available extra mass on the Launch Vehicle concerned. Such available extra mass shall be shared with the Third Party Customer(s) of ARIANESPACE on a pro rata basis of the of the respective masses of the Satellite and the satellite(s) of the Third Party Customer(s) of ARIANESPACE. Customer shall then have the right within ten days of such notification to increase the Satellite mass by such available extra mass for the Satellite [************************]. Failing response during such period, Customer shall be deemed to have refused this additional mass. Any decrease in mass, as provided for in this Paragraph B) shall be subject to a price decrease in the remuneration stated above in Subparagraph 8.1.1. as follows: i) from 0 kilogram to 50 kilograms: [*******************] ii) from 51 kilograms to 200 kilograms: a) [********************] if the Launch is performed by way of an Ariane 5 Launch Vehicle or if the Launch is performed by way of a dedicated Ariane 44 LP Launch Vehicle, or b) [****************] if the Launch is performed by way of a dedicated 44L Launch Vehicle. The above prices are firm and fixed prices and apply for each additional kilogram or fraction of a kilogram the Satellite mass is increased or decreased and will be paid or credited in the manner set forth under Paragraph 10.1.3. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 34 8.1.4. For the provision of Associated Services not included in the Launch Services Price and ordered by Customer after the date of execution of this Agreement and Associated Services which will have to be reperformed due to a postponement requested by Customer, the Catalogue price for the applicable year of the relevant Launch will be applied (Firm Fixed prices). 8.2. In consideration of the options offered to Customer under this Agreement, Customer has paid to ARIANESPACE a one time Option Fee of [***********************************] at the date of execution of this Agreement. The Option Credit(s) under Paragraph 10.1.1.B) (if any) credited from this Option Fee will be considered as part of the Launch Services Price that has been paid for the Launch considered. 8.3. Prices, expenses, and charges mentioned in the present Agreement are free of any and all French taxes and other duties. Customer will not be charged for any taxes or duties. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 35 ARTICLE 9 PRICE ESCALATION FORMULA 9.1. The amount of A) any Launch Services Price subject to escalation under Paragraph 8.1.1.C)i) and ii), and B) each payment subject to escalation under Paragraph 13.2.2. or will be escalated according to the following escalation formulae : Index PA = PAo -------- (Index)o WHERE: A) For the purpose of Paragraph 8.1.1.C)i) and ii) PA is the escalated launch services price under Paragraph 10.1.1C)ii) in US Dollars. PA is [**********************************************] Index is the US Department of Labor, Bureau of Labor Statistics index for the "Private Business Sector, All Persons, Productivity, Hourly Compensation, Unit Labor Costs and Price Seasonally adjusted, Table 1" a) 1 October 1996 value for the application of Paragraph 8.1.1.C)i) and b) 1 October 1997 value for the application of Paragraph 8.1.1.C)ii). Index is the same index as defined above with official value valid for the month corresponding to L-18 months of the Optional Launch as determined at the date of exercise of the relevant Launch Option. This index being published on a quarterly basis, its value is defined as follows : [***] Filed separately with the Commission pursuant to a request for confidential treatment. 36 (i) The index corresponding to the first month of a quarter is the index published for the previous quarter. Example : January 85 index is the one issued for the last quarter of 84 (IV-84). (ii) The index corresponding to the second or the third month of a quarter is calculated by linear interpolation. Example : February 85 index is equal to January 85 index (IV-84) plus one third of (April 85 index (I-85) minus January 85 (IV-84) index). B) For the purpose of Paragraph 13.2.2.: PA is the escalated payment amount in US Dollars. PA is the unescalated payment amount in US Dollars. Index is the US Department of Labor, Bureau of Labor Statistics index for the "Private Business Sector, All Persons, Productivity, Hourly Compensation, Unit Labor Costs and Price Seasonally adjusted, Table 1" November 1995 value. Index is the same index as defined above with official value valid for the month corresponding to the month in which the payment is due. This index being published on a quarterly basis, its value is defined as follows : (i) The index corresponding to the first month of a quarter is the index published for the previous quarter. Example : January 85 index is the one issued for the last quarter of 84 (IV-84). 37 (ii) The index corresponding to the second or the third month of a quarter is calculated by linear interpolation. Example : February 85 index is equal to January 85 index (IV-84) plus one third of (April 85 index (I-85) minus January 85 (IV-84) index). 9.2. Should one or several indices used in the escalation formula cease to be issued by the relevant Authority(ies), the index (indices) intended for substitution will be proposed by ARIANESPACE for agreement by Customer, unless the index (indices) is (are) imposed or recommended by the Authority(ies), in which case the imposed or recommended index (indices) shall apply. 38 Article 10 Payment SCHEDULE 10.1. Payment of the remunerations under Paragraph 8.1. of Article 8 of this Agreement shall be made in accordance with the following payment schedules : 10.1.1. For the price referred to under the relevant Subparagraph of Paragraph 8.1.1.: A) For the Firm Launch #1 - --------------------------- -------------------------------------------------- DATE Percentage of the portion of the Launch Services Price referred to in Subparagraph 8.1.1.A) of Article 8 of this Agreement - --------------------------- -------------------------------------------------- [***********] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 39 - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- [****] [************] - --------------------------- -------------------------------------------------- Where * Pr means the price reduction calculated under Subparagraph 8.1.1.D).The Parties agree that, at the date hereof, this price reduction for the Launch Services Price under Paragraph 8.1.1.A), equals [****************] [*************************] [********************************************************************* ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** *******************************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 40 B) For the Firm Launch #2 - --------------------------- -------------------------------------------------- DATE Percentage of the portion of the Launch Services Price referred to in Subparagraph 8.1.1.B) of Article 8 of this Agreement - --------------------------- -------------------------------------------------- [***********] [****************************** *****************************] - --------------------------- -------------------------------------------------- [****************] [******************* ********************************] - --------------------------- -------------------------------------------------- [************************] [************************] ************] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [**********] [**********] - --------------------------- -------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 41 Where * Pr means the price reduction under Subparagraph 8.1.1.D).The Parties agree that, at the date hereof, this price reduction for the Launch Services Price under Paragraph 8.1.1.B), equals [**********] C) For Optional Launches #1 and #2: i) If Customer selects a baseline mass of 3450 kg, for the prices referred to in Paragraph 8.1.1.C)i) : - --------------------------- -------------------------------------------------- DATE Percentage of the portion of the relevant Launch Services Price referred to in Subparagraphs 8.1.1. C)i) of Article 8 of this Agreement - --------------------------- -------------------------------------------------- [**********] [***************************] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 42 - --------------------------- -------------------------------------------------- [************] [*****] - --------------------------- -------------------------------------------------- Where: *the Option Credit means: For Optional Launch #1: [*********] For Optional Launch #2 : [*********] ** Pr means the applicable price reduction under Subparagraph 8.1.1. D) If the Price Reduction concerned exceeds the value of this payment, the excess Price Reduction shall be equally aportioned between the payments due at L-10 months and L-8 months. *** [***********************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 43 ii) If Customer selects a baseline mass of 4500 kg, for the prices referred to in Paragraph 8.1.1.C)ii) : - --------------------------- -------------------------------------------------- DATE Percentage of the portion of the Launch Services Price referred to in Subparagraph 8.1.1.C)ii) of Article 8 of this Agreement - --------------------------- -------------------------------------------------- [**********] [***************] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [**********] [*****] - --------------------------- -------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 44 Where *the Option Credit means: For Optional Launch #1: [**********] For Optional Launch #2 : [**********] ** Pr means the price reduction calculated under Subparagraph 8.1.1. D) If the Price Reduction concerned exceeds the value of this payment, the excess Price Reduction shall be equally aportioned between the payments due at L-10 months and L-8 months. 10.1.2. The price of the Relaunch Credit Option or the Cash Option shall be paid in accordance with the following payment schedule: - --------------------------- -------------------------------------------------- DATE Percentage of the price of the applicable option referred to in Sub-paragraph 8.1.2. of Article 8 of this Agreement - --------------------------- -------------------------------------------------- Date of exercise [***] L minus 3 months [***] - --------------------------- -------------------------------------------------- 10.1.3. The price increase or decrease under Paragraph 8.1.2. for variation of the Satellite mass shall be due or, in the event of a price decrease, credited by ARIANESPACE at the date of the next payment due under Paragraph 10.1.1. immediately following notification to ARIANESPACE by Customer under Paragraph 8.1.2.A) or B). If no such payment remains due under the relevant payment schedule, the price increase or decrease, shall be due at the applicable date referred to above under this Paragraph 10.1.2. and payable thirty days thereafter, or, notwithstanding Paragraphs 10.3.1. and 10.3.2. shall be payable five days before the Launch Day whichever is the earlier. 10.1.4. The Option Fee under Subparagraph 8.2. has been paid at the date of execution of this Agreement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 45 10.2. Payment for Associated Service(s) Associated Services referred to in Paragraph 8.1.3. of this Agreement shall be paid against ARIANESPACE invoice presented upon completion of the corresponding service(s). Associated Services included in the Launch Services Price which are not actually used by Customer are not subject to a reimbursement by ARIANESPACE to Customer. 10.3. Terms and conditions of payment/ARIANESPACE's invoices 10.3.1. In all cases where this Agreement establishes a precise payment date, payment shall be made on such date, or within thirty (30) days of Customer's receipt of the corresponding ARIANESPACE invoice, whichever is later, except for the first payment provided for in Paragraph 10.1. of this Article and for the Option Fee under Subparagraph 8.2. , for which invoice(s) will be presented and paid upon execution of this Agreement. 10.3.2. In all cases where this Agreement does not establish a precise payment date, payment shall be made on the date that payment becomes due, or within thirty (30) days of Customer's receipt of the corresponding ARIANESPACE invoice, whichever is later. 10.3.3. ARIANESPACE invoices may contain, if applicable, the provisional application of the escalation formula set forth in Article 9 of this Agreement, using the most recent indices available on the date of said invoice. 10.3.4. A complementary ARIANESPACE invoice, showing the definitive total(s) after application of the escalation formula set forth in Article 9 of this Agreement, shall be prepared following publication of the indices applicable on the due date for payment. 10.3.5. Any and all ARIANESPACE invoices shall be drawn up in two copies (one original and one copy) and sent to : 46 PanAmSat Corporation One Pickwick Plaza Greenwich, Connecticut 06830 USA Attention: Comptroller The method for calculating the amount of each such invoice shall be shown clearly. 10.3.6. Payments shall be made, to the account(s) designated on the relevant invoice, by telegraphic bank transfer, free of charge for ARIANESPACE, with telex notice from the issuing bank to the receiving bank. ARIANESPACE shall be responsible for telex expenses. The notice shall clearly state the value date to be applied and the bank through which the funds will be made available to the receiving bank or its correspondent. Payment shall be effective as of the date on which the amount of the ARIANESPACE invoice is received by ARIANESPACE's bank. 10.3.7. Customer's payment(s) shall be in the amount(s) invoiced by ARIANESPACE, and shall be made net, free and clear of any and all taxes, duties, or withholdings that may be imposed in the Country from which they are paid so that ARIANESPACE receives each such payment in its entirety as if no such tax, duty, or withholding had been made. 47 10.4. Late Payment 10.4.1. In the event of late payment, Customer shall pay ARIANESPACE during the delay interest equal to the average Base Rate increased by one (1) point. The computation of interest for late payments shall be based on a year of 360 days. In the event that such late payment has not been cured by Customer at latest fifteen (15) days after written notice to that effect by ARIANESPACE, ARIANESPACE shall be entitled to suspend any and all of its activities in preparation for the Launches during any such period of non-payment and to reschedule the Launches under Subparagraph 11.3.1. of Article 11 of this Agreement. 10.5. Waiver of Deferral, Withholding or Set-off Customer irrevocably waives any right to defer, withhold or set-off by counterclaims or otherwise all or any part of any payment under this Agreement for any reason whatsoever. All payments due under this Agreement shall be made in their entirety and on the dates set out under this Agreement. 48 ARTICLE 11 LAUNCH POSTPONEMENTS/ACCELERATION 11.1. Each postponement of the Launch Period, the Launch Slot, the Launch Day or the Launch Time, for whatever reason, shall be governed by the following conditions, and any right of the Parties which is not mentioned in this Agreement shall be expressly excluded. 11.2. Postponements requested by Customer 11.2.1. Postponement of Launch Period or Launch Slot 11.2.1.1. Customer shall have the right for any reason whatsoever to postpone either the Launch Period of the Launch or the Launch Slot once determined, in which case it will propose by notifying in writing to ARIANESPACE the new requested Launch Period or, as the case may be, a new requested Launch Slot. 11.2.1.2. Within two weeks of receipt of Customer's written request, ARIANESPACE shall inform Customer whether a Launch Opportunity exists within the Launch Period, or within the Launch Slot requested, or will propose a new Launch Period or Launch Slot. Customer shall have a thirty (30) day period following receipt of ARIANESPACE's proposition to give its written consent or to propose an alternative Launch Period in which case the procedure stated in Paragraph 11.2.1.1. hereabove shall apply. 11.2.1.3. Should for a Launch under this Agreement, the aggregate duration of all postponements other than the duration of any postponement under Paragraph 11.2.1.5. requested by Customer under this Agreement exceed a total of twelve (12) months (to the exclusion of postponements due to Force Majeure Events up to a cumulative maximum of six months per Launch), the Launch Services Price of the relevant Launch shall be adjusted as if the Launch had been postponed under the provisions of Paragraph 11.2.1.5.. 49 11.2.1.4. [*********************************************************** ***********************************] 11.2.1.5 Notwithstanding the foregoing, Customer shall have the right to postpone the nominal Launch Period of Optional Launches #1 and #2 by written notice received by ARIANESPACE prior to the exercise of a Launch Option and no later than L-18 months of the Optional Launch concerned. Postponement of an Optional Launch under the conditions of this Paragraph shall postpone the date of exercise of the Optional Launch correlatively and shall cause an adjustment of the Launch Services Price under the conditions of Paragraphs 8.1.1.C) and the applicable payment schedule shall be suspended under the conditions of Paragraph 11.4. provided that, in accordance with Paragraph 4.4., in no event may Customer exercise its right under this Paragraph 11.2.1.5. to postpone a Launch beyond a six month Launch Period starting: (2)i) for Optional Launch #1: 1 January 2001, and ii) for Optional Launch #2: 1 July2001. 11.2.2. Postponement of the Launch Day and/or Launch Time within Launch Slot 11.2.2.1. Customer shall have the right, upon written request, to postpone the Launch Day within the Launch Slot, for any reason whatsoever. The choice of a new Launch Day shall be made by mutual agreement of the Parties taking into account the technical needs and interests of Customer and the Third Party Customer(s) of ARIANESPACE, the time necessary for the revalidation of the Launch System, and the meteorological forecasts. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 50 11.2.2.2. Each such postponement shall be subject to the following postponement fees to be paid by Customer: Date Postponement fees per effective day of of request Postponement for a for Postponement Launch in 1997 [***************** [*****] *****] [***************] [**********] [***************] [**********] [***************] [**********] [***************] [**********] [***************] [**********] [***************] [**********] Where D = Launch Day within the Launch Slot. * = First and last day included 11.2.2.3. Postponement requests, received by ARIANESPACE, once the filling of the cryogenic stage has been started or has already been achieved, shall be subject to an additional payment of [** ***********************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 51 11.2.2.4. The amounts set forth in Paragraphs 11.2.2.2. and 11.2.2.3. are valid for a Launch to occur in calendar year 1997. For a Launch taking place after calendar year 1997, these amounts will vary in the same proportion as the price of Associated Services, such increase being in any case limited to 10% per year. Said amounts are due for payment as of the date of said postponement request. 11.2.2.5. Should postponement of the Launch Day finally lead to postponement beyond the Launch Slot, Paragraph 11.2.1. of Article 11 of this Agreement, shall govern. 11.2.2.6. Postponements by Customer of the Launch Time within the Launch Window may only be requested during the countdown period. If, after Customer has requested such postponement, technical reasons, including those linked with the Third Party Customer(s) of ARIANESPACE, or meteorological reasons prevent ARIANESPACE from performing the Launch in the Launch Window opening during the Launch Day, this postponement shall be considered as a postponement of the Launch Day, and Sub-paragraphs 11.2.2.2. and 11.2.2.3. of Article 11 of this Agreement, shall govern. 11.2.3. Notwithstanding the foregoing, no postponement fees shall be payable to ARIANESPACE for postponements as a result of: (i) an Event of Force Majeure up to a cumulative period of six (6) months, and/or (ii) any damage(s) to the Property of Customer and/or the property of its Associates when caused by ARIANESPACE and/or Third Party Customer(s) of ARIANESPACE and/or other customers of ARIANESPACE and/or their Associates, and/or 52 (iii) any damage(s) for bodily harm sustained by Customer and/or its Associates when caused by ARIANESPACE and/or Third Party Customer(s) of ARIANESPACE and/or other customers of ARIANESPACE and/or its or their Associates. 11.2.4. The postponement by Customer of the Launch Day, Launch Window or Launch Time shall not be subject to the payment of postponement fees when it is due to ARIANESPACE's non-fulfillment of its obligations. In this event, provided that ARIANESPACE has not cured such non-fulfillment within ten days of a notice to that effect by Customer and subject to such failure making the Launch impossible within the Launch Period, Launch Slot or during Launch Window of the Launch Day, or at the Launch Time, the terms of Paragraph 11.3. of Article 11 of this Agreement shall govern. Such postponement shall be deemed to have been requested by ARIANESPACE at the date of Customer's request for a postponement of the Launch. 11.2.5. In no event shall the aggregate liability of Customer which shall be due to ARIANESPACE under this Paragraph 11.2. exceed for a Launch under this Agreement [****************************** **********************] 11.3. Launch postponement requested by ARIANESPACE 11.3.1. ARIANESPACE shall have the right to postpone the Launch, for the following reasons : 11.3.1.1. Postponement of Launch Period and of Launch Slot. a) ARIANESPACE or its Associates encounter adverse technical problems preventing the Launch from taking place under satisfactory conditions of safety or reliability. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 53 b) ARIANESPACE cannot perform the Launch as a Double Launch for any reason whatsoever. c) ARIANESPACE is requested to perform replacement launch(es), or to launch scientific satellite(s) whose mission(s) may be degraded in the event of postponement. d) ARIANESPACE reschedules the launch(es) due to postponement(s) by ARIANESPACE of satellite(s) having an earlier Launch Period or Slot than Customer's Satellite(s). 11.3.1.2. Postponement of Launch Day within the Launch Slot and/or Launch Time within the Launch Window. a) For any of the reasons listed in Subparagraph 11.3.1.1. a) b) c) and d) above, and b) If ARIANESPACE cannot perform the Launch as a Shared Launch for any reason whatsoever. 11.3.2. The Parties shall determine by mutual agreement a new Launch Period and/or a new Launch Slot as near as possible to the postponed one in accordance with the following criteria : - the availability of a Launch Possibility; - Launch Rank of Customer's Satellite ; - date of signature of this Agreement. The Launch Day and the Launch Window within the new Launch Slot shall be determined by ARIANESPACE according to the technical constraints of ARIANESPACE, Customer and the Third Party Customer(s) of ARIANESPACE, and their respective interests. 54 In the event that ARIANESPACE shall be obliged to postpone the launch of a satellite of another client of ARIANESPACE ("Third Party Launch") in order to make available a Launch Possibility for Customer's Satellite, then , in determining which satellite to retain on such Third Party Launch, ARIANESPACE shall retain the satellite which is compatible in size with Customer's Satellite or, if two or more satellites on such Third Party Launch are compatible in size and in class with Customer' Satellite, ARIANESPACE shall apply the criteria numbered (1) to (3) inclusive in, and in the order which is set out in Sub-paragraph 11.3.2. of this Article 11. 11.3.3. The postponement by ARIANESPACE of the Launch Period, Launch Slot, Launch Day, Launch Window, or Launch Time is not subject to the payment of postponement fees by Customer, unless it is due to Customer's non-fulfillment of its obligations under this Agreement. In this event, provided that Customer has not cured such non-fulfillment within ten days of a notice to that effect from ARIANESPACE and subject to such failure making the Launch impossible within the Launch Period, Launch Slot, or during Launch Window of the Launch Day, or at the Launch Time : - The terms of Sub-paragraph 11.2.1. of Article 11 of this Agreement shall govern if ARIANESPACE decides to postpone the Launch Period or the Launch Slot ; - The terms of Sub-paragraph 11.2.2. of Article 11 of this Agreement shall govern if ARIANESPACE decides to postpone the Launch Day. Such a postponement shall be considered as requested by Customer as of the date of Customer's non-fulfillment of its obligations. 11.3.4. Postponements of Launches by ARIANESPACE shall not be subject to the payment of liquidated damages by Customer. 11.4. Any Launch postponement provided for in Article 11 of this Agreement shall not modify the progress payment schedule set forth in Paragraph 10.1. of Article 10 of this Agreement. Notwithstanding the foregoing: 55 i) Should a Launch be postponed one or more times by ARIANESPACE in accordance with Sub-paragraph 11.3.1. or 11.2.4., then Customer shall be allowed, for the Launch, [************************************************* *************************************************************************** *************************************************************************** *************************************************************************** *************************************************************************** *************************************************************************** *************************************************************************** *************************************************************************** *************************************************************************** **********************************] ii) if Customer postpones an Optional Launch under the provisions of Paragraph 11.2.1.5., the payments due after the date of such postponement under the payment plan of Paragraph 8.1.1B) shall be suspended and then resumed and shifted forward by the duration of the Customer postponement under Paragraph 11.2.1.5. 11.5. Acceleration of a Launch Period or of a Launch Slot 11.5.1. ARIANESPACE undertakes to inform Customer of any LaunchOpportunity which may appear during the period included between: (i) the first day of the concerned initial Period and the first day of the Launch Period or of the Launch Slot allocated to the Launch concerned under Subparagraph 11.3.2., in the case of Customer not having requested a postponement earlier; or (ii) the first day of the last Launch Period or of the last Launch Slot requested by Customer under Subparagraph 11.2.1.1., and the actual Launch date of the Launch concerned, in the case of Customer already having requested postponement of the Launch concerned. Within a period of fifteen (15) days from notification by ARIANESPACE, Customer may take advantage of its first right of refusal to accelerate a Launch to any Launch Opportunity so indicated by ARIANESPACE. If it has not replied within that time, it will be considered that Customer has declined the offer for an advancement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 56 11.5.2. In addition, Customer may, at any time, request that ARIANESPACE accelerate a given Launch Period or Slot to a date which Customer will designate. As quickly as possible, and at the latest within thirty days following receipt of this request, ARIANESPACE will let Customer know if there is a Launch Opportunity within the requested period and will make every effort to allocate to the Launch in question the Launch Opportunity nearest to the date requested by Customer. 11.5.3. For the purposes of application of Paragraph 11.3.4. of this Article 11, the number of days by which the Launch under this Agreement has been accelerated under this Paragraph 11.5. will be deducted from the number of days for which ARIANESPACE must pay Customer liquidated damages for the Launch. 11.5.4. In the case of the Launch Period or the Launch Slot of the Launch being accelerated as stipulated in this Paragraph, the payments remaining due at the date to which such Launch has been accelerated will be advanced by a period equal to that of the acceleration of such Launch and the net present value of the applicable Launch Services price shall be restored using the Base Rate as rate of return. Such adjustment shall be due by Customer to ARIANESPACE as of the date of the decision of acceleration is made. 57 ARTICLE 12 RIGHT OF OWNERSHIP AND CUSTODY 12.1. The obligations of ARIANESPACE under this Agreement being strictly limited to the Services set forth in this Agreement, Customer acknowledges that at no time shall it have any right of ownership of, or any other right in, or title to, the Property of ARIANESPACE. Said Property shall at all times be considered to be the absolute property of ARIANESPACE. 12.2. On the other hand, ARIANESPACE acknowledges that at no time during the implementation of this Agreement shall it have any right of ownership, or any other right in, or title to, the Property of Customer. Said Property shall at all times be considered to be the absolute property of Customer. 12.3. At all times during the implementation of this Agreement, each Party shall be deemed to have full custody and possession of the Property it is deemed to own. 12.4. ARIANESPACE is hereby authorized to destroy, without indemnity or damages being payable to Customer, the Launch Vehicle and the Satellite in the event that, following ignition of the Launch Vehicle, such action shall prove necessary to avoid damage to persons or property. The foregoing shall not be deemed to waive Customer's rights for the Launch under Paragraph 4.4 of this Agreement. 58 ARTICLE 13 REPLACEMENT LAUNCH 13.1. Terms 13.1.1. Customer is entitled to request a Replacement Launch from ARIANESPACE in the event that, following the Launch, either the Launch Mission or the Satellite Mission has not been accomplished for any reason whatsoever. Replacement Launch Services are subject to the conditions set forth in Article 13 of this Agreement. Any and all other rights and remedies of Customer are excluded whatever their nature. 13.1.2. Customer shall be entitled to have a Replacement Launch Slot allocated to it by ARIANESPACE within [************************** *******] following the calendar month within which a written Replacement Launch request has been received by ARIANESPACE or within such longer period as may be indicated by Customer in said request up to a maximum of twenty six calendar months after the date of Customer's request. 13.1.3. The written Replacement Launch request must: -have been received by ARIANESPACE no later than the second calendar month following the month in which the cause of the failure of either the Launch Vehicle Mission or the Satellite Mission has been established, except that such Satellite Mission failure must have occurred within the twenty-seven (27) calendar month period following the Launch Slot of the initial Launch. Notwithstanding the foregoing, if Customer is entitled to a Reflight, such written request shall be received by ARIANESPACE within the ninety (90) day period following the date when the Parties have agreed on a Launch Failure. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 59 -indicate the Launch Period requested by Customer within the period under Paragraph 13.1.2. of Article 13 of this Agreement. It is understood that the replacement Satellite and its Ancillary Equipment shall be placed at ARIANESPACE's disposal pursuant to the schedule of Annex 3 to this Agreement, L being the first day of the Launch Period desired by Customer. 13.1.4. ARIANESPACE shall inform Customer, within the calendar month following receipt of said request, if a Launch Opportunity exists within the requested Launch Period and, in any event, shall allocate a Launch Period (and if reasonably practicable a Launch Slot) to Customer, whose first day shall be earlier than the expiration of the period specified in Paragraph 13.1.2. of Article 13 of this Agreement by postponing if necessary the launch of another customer of ARIANESPACE other than a replacement launch requested prior to Customer's order of the Replacement Launch under this Paragraph. The Launch Slot allocated shall not begin earlier than the beginning of the Launch Period requested by Customer. 13.1.5. The replacement Satellite shall be in accordance with the interface control file (DCI) governing the initial payload. Notwithstanding the foregoing, if Customer is entitled to a Replacement Launch, the replacement satellite may differ from the DCI and need not have the same satellite mission (i.e. it may be another satellite in Customer's fleet of satellites awaiting launch). In such a case, the Parties agree to adjust consequently this Agreement, including the technical annexes and ARIANESPACE shall allocate to Customer the nearest Launch Opportunity. 13.2. Conditions 13.2.1 Except for a Reflight, remuneration for Replacement Launch Services shall be the then applicable price for a satellite of a mass similar to that of the replacement Satellite under the ARIANESPACE pricing policy for a Launch at the date of the Replacement Launch, adjusted for the costs of refinancing due to the shorter payment schedule, as well as any charges for modification of equipment with respect to the Launch Vehicle designated for the Replacement Launch, that ARIANESPACE shall have incurred. 60 13.2.2. A) Notwithstanding Sub-paragraph 13.2.1. hereabove, the Launch Services Price for a Replacement Launch which is not a Reflight taking place at the latest by: i) twenty four (24) months after the actual date of the Launch if said Launch has resulted in a Launch Failure, or ii) in all other cases, 31 December 2003. shall be a fixed price of: a) [**************************************************************** *********] for an individual mass of 3450 kg, or The above prices is, subject to reduction under Paragraph 8.1.1.D) and is based on: i) November 1995 economic conditions and ii) the following payment schedule: - --------------------------- ---------------------------------------------------- DATE Pertcentage of the portion of the Launch Services Price referred to in this Subparagraph 13.2.2.A) - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 61 The price referred to in this Paragraph 13.2.2.A)i) shall be adjusted as appropriate using a) the Base Rate against the shortened payment schedule in order to restore the net present value in all cases where the date of request of the Replacement Launch does not permit to respect the above payment schedule and b) the escalation formula contained in Article 9 of this Agreement from November 1995 up to and including the due date of each progress payment. b) the price set forth under Paragraph 8.1.1.C)ii) for an individual mass of 4500 kg and payable as per the payment plan under Paragraph 10.1.1.C). The price referred to in this Paragraph 13.2.2.A) shall be adjusted as appropriate using the Base Rate against the shortened payment schedule in order to restore the net present value in all cases where the date of request of the Replacement Launch does not permit to respect the above payment schedule. B) At the time of order of the Replacement Launch, Customer may increase or decrease the Satellite mass referred to under Paragraph 13.2.2. A): i) under the conditions stated under Paragraph 8.1.3.A) if Customer has selected an individual mass of 3450 kg, or ii) under the conditions stated under Paragraph 8.1.3.B) if Customer has selected an individual mass of 4500 kg. Except that in both cases, the applicable price shall be due at the date of order of the Replacement Launch. 62 C) Furthermore for Launches with an initial Launch Period starting on or after 1 January 2001, the prices set forth in Paragraphs 13.2.2.A) and B) shall only be valid if at the date of order of the Replacement Launch, the fixing rate published by the Paris Stock Exchange for the exchange rate between the French Franc/U.S. Dollar is equal to or higher than [*****************] Should the U.S. Dollar fall under the above stated value at said date, the prices shall be adjusted accordingly. 13.2.3. The remuneration for Associated Service(s) shall be the applicable price for a Launch to take place within the calendar year of the Replacement Launch. 13.2.4. The price set forth in Paragraphs 13.2.1. of Article 13 of this Agreement shall be escalated in accordance with Article 9 of this Agreement on the basis of economic conditions prevailing on the date that said price is determined. 13.2.5. The payment schedule shall enable the payment of the entire price for Replacement Launch Services prior to said Replacement Launch. 13.2.6. Except for a Reflight, any Replacement Launch shall form the subject of a separate launch services agreement drafted in accordance with the principles set forth in this Agreement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 63 ARTICLE 14 ALLOCATION OF POTENTIAL LIABILITIES AND RISKS 14.1. Allocation of damages and risks caused by one of the Parties and/or its Associates to the other Party and/or its Associates. 14.1.1. Due to the special character of Services, the Parties have agreed that any liability of ARIANESPACE or of Customer arising from the defective, late, or non-performance of ARIANESPACE's Services and Customer's technical obligations under this Agreement shall, in all circumstances, including termination of this Agreement, be strictly limited to the liability expressly provided for in this Agreement, to the exclusion of any other remedies or claims for damages or indemnities. 14.1.2. Each Party shall bear any and all loss of or damage to property and any bodily harm (including death) and all consequences, whether direct or indirect, of such loss, damage or bodily harm (including death), and/or of a Launch Mission failure and/or of a Satellite Mission failure, which it or its Associates may sustain that arises in any way in connection with this Agreement or the performance of this Agreement. Each Party irrevocably agrees to a no-fault, no-subrogation, inter-party waiver of liability, and waives the right to make any claims or to initiate any proceedings whether judicial, arbitral, or administrative on this account against the other Party or that other Party's Associates for any reason whatsoever. Each Party agrees to bear the financial and any other consequences of such loss, damage or bodily harm (including death) and/or of a Launch Mission failure and/or a Satellite Mission failure which it or its Associates may sustain, without recourse against the other Party or the other Party's Associates. 64 14.1.3 In the event that one or more Associates of a Party shall proceed against the other Party and/or that Party's Associates as a result of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure, the first Party shall indemnify, hold harmless, dispose of any claim, and defend, when not contrary to the governing rules of procedure, the other Party and/or its Associates, as the case may be, from any liability or expense, including attorneys' fees, on account of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure and shall pay all expenses and satisfy all judgments and awards which may be incurred by or rendered against that other Party and or its Associates. 14.2. Loss or damage or bodily harm caused or sustained by Third Party Customer(s) of ARIANESPACE or its (their) Associates 14.2.1 Each Party shall bear any and all loss or damage to property and any bodily harm (including death) and all consequences, whether direct or indirect, of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure, which it or its Associates may sustain, that is caused, in any way, by (a) Third Party Customer(s) of ARIANESPACE or its (their) Associates in connection with or by the performance of this Agreement and/or the agreement signed by ARIANESPACE with such Third Party Customer(s) of ARIANESPACE. 14.2.2 Customer hereby irrevocably agrees to a no-fault, no-subrogation, inter-party waiver of liability and waives the right to make any claims or to initiate any proceedings whether judicial, arbitral, administrative or otherwise on account of any such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure against Third Party Customer(s) of ARIANESPACE, and/or ARIANESPACE and/or their respective Associates for any reason whatsoever. Customer agrees to bear the financial and any other consequences of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure caused in any way by (a) Third Party Customer(s) of ARIANESPACE or its (their) Associates without recourse against the Third Party Customer(s) of ARIANESPACE and/or ARIANESPACE and/or their respective Associates. 65 In the event that one or more of Customer's Associate(s) proceed against the Third Party Customer(s) of ARIANESPACE and/or ARIANESPACE and/or their respective Associates as a result of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure caused in any way to it by such Third Party Customer(s) of ARIANESPACE or its (their) Associates, Customer shall indemnify, hold harmless, dispose of any claim and defend, when not contrary to the governing rules of procedure, such Third Party Customer(s) of ARIANESPACE, and/or ARIANESPACE and/or their respective Associates from any liability or expense, including attorneys' fees, on account of such loss, damage or bodily harm (including death) and/or Launch Mission failure and/or Satellite Mission failure, and shall pay all expenses and satisfy all judgments and awards which may be incurred by or rendered against the Third Party Customer of ARIANESPACE and/or ARIANESPACE, and/or their respective Associates. 14.2.3 In the event that (a) Third Party Customer(s) of ARIANESPACE and/or its (their) Associates proceed against Customer and/or its Associates as a result of loss, damage or bodily harm (including death) and/or launch mission failure and/or satellite mission failure caused in any way to it and/or its (their) Associates in connection \with or by the performance of this Agreement and/or the agreement signed by ARIANESPACE with such Third Party Customer(s) of ARIANESPACE, ARIANESPACE shall indemnify, hold harmless, dispose of any claim and defend, when not contrary to the governing rules of procedure, Customer and/or its Associates from any liability or expense, including attorney's fees, on account of such loss, damage or bodily harm (including death), and/or Launch Mission failure and/or Satellite Mission failure, and shall pay expenses and satisfy all judgments and awards which may be incurred by or rendered against Customer and/or its Associates. 14.3 Indemnification Each Party obligates itself to take all necessary and reasonable steps to foreclose claims for loss, damage or bodily harm (including death) by any participant in the Launch activity. Each Party shall require its Associate(s) to agree to a no-fault, no-subrogation, inter-party waiver of liability and indemnity for loss, damage or bodily harm (including death) its Associates sustain identical to the Parties respective undertakings under this Article 14 of this Agreement. Furthermore, ARIANESPACE shall require all Third Party Customer(s) of ARIANESPACE entering into launch services agreement with ARIANESPACE to agree to the inter-party waiver and indemnities as set forth in this Article 14 of this Agreement. 66 14.4. Liability for damages suffered by Third Parties 14.4.1. Each Party shall be solely and entirely liable for loss, damage or bodily harm (including death), in any case whether direct or indirect, which it or its Associates shall cause to be sustained whether directly or indirectly by a Third Party in the performance of this Agreement. 14.4.2. In the event of any proceeding, whether judicial, arbitral, administrative or otherwise, by a Third Party against one of the Parties, or its Associates on account of loss or damage or bodily harm (including death) caused whether directly or indirectly by the other Party, its Property or its Associates, the latter Party shall indemnify and hold harmless the former Party and/or the former Party's Associates, as the case may be, and shall advance any funds necessary to defend their interests. 14.5. Infringement of Industrial property rights of third parties 14.5.1. ARIANESPACE undertakes to indemnify and hold Customer harmless with respect to any injury, cost, and expenditure resulting from an infringement or claim of infringement of patent rights or any other industrial or intellectual property rights of a third party which may arise from Customer's use of ARIANESPACE's Services, including without limitation the use of any and all products, processes, articles of manufacture, supporting equipment, facilities, and services by ARIANESPACE in connection with said Services unless the infringement of rights set forth above shall have been mainly caused by an infringement of a right of a third party for which Customer is liable pursuant to Paragraph 14.5.2. of Article 14 of this Agreement. 67 14.5.2. Customer undertakes to indemnify and hold ARIANESPACE harmless with respect to any injury, cost, and expenditure resulting from an infringement or claim of infringement of the patent rights or any other industrial or intellectual property rights of a third party which shall have been caused by Customer with respect to the design or manufacture of the Satellite, or by ARIANESPACE's compliance with specifications furnished by Customer with respect to the Launch Mission and the Satellite Mission unless such infringement of rights set forth hereabove shall have been mainly caused by an infringement of a right of a third party for which ARIANESPACE is liable pursuant to Paragraph 14.5.1. of this Agreement. 14.5.3. The rights to indemnification provided hereunder shall be subject to the observance of the following conditions: 14.5.3.1. The Party seeking indemnification shall promptly advise the other Party of the filing of any suit, or of any written or oral claim, alleging an infringement of the third party's rights, which it may receive in relation to the execution of this Agreement. 14.5.3.2. The Party sued or against whom the claim is otherwise made shall take no steps in the dispute with the third party, nor shall it reach a compromise, without the prior written approval of the other Party, which approval shall not be unreasonably withheld or delayed. 14.5.4. The Party required to hold the other harmless shall assist and assume, when not contrary to the governing rules of procedure, the defense of any claim or suit and/or settlement thereof, shall take all other steps which it may reasonably be expected to take, given the circumstances on the one hand, and on the other hand the obligations incurred by it under the preceding provisions, to avoid, settle, or otherwise terminate the dispute under Article 14 of this Agreement on the other hand, and shall pay all litigation and administrative costs and expenses incurred in connection with the defense of any such suit, shall satisfy any judgments rendered by a court of competent jurisdiction in such suits, and shall make all settlement payments. 68 14.5.5. In the event that ARIANESPACE, with respect to the Launch, and Customer, with respect to the Satellite, shall be the subject of the same court action or the same proceedings based on alleged infringements of patent rights or any other industrial or intellectual property rights of a third party pursuant to both Sub-paragraphs 14.5.1. and 14.5.2. of Article 14 of this Agreement, ARIANESPACE and Customer shall jointly undertake the defense and shall bear the damages, costs and expenditures pro rata according to their respective liabilities. In the event that the pro rata calculation of this Sub-paragraph 14.5.5. is applicable but should cause a problem, the Parties undertake in good faith to resolve the problem by means of negotiation. 14.5.6. It is expressly understood that neither Party's entry into this Agreement, and either Party's performance of acts required by this Agreement, grants any rights to or under any of either Party's respective patents, proprietary information, and/or data, to each other or to any third party, unless such grant is expressly recited in a separate written document duly executed by or on behalf of the granting Party. 69 ARTICLE 15 INSURANCE 15.1. ARIANESPACE shall, for the Launch, take out an occurrence basis type insurance policy at no cost to Customer, to protect itself and Customer against liability for property and bodily harm which Third Parties may sustain and which are caused by the Combined Space Vehicle or part thereof. In said insurance policy the natural and corporate bodies hereafter shall be named as assured : 1. The Government of France. 2. The Centre National d'Etudes Spatiales "C.N.E.S." and any state of launch as per Convention of March 29, 1972 related to the international liability for damages caused by spacecraft. 3. The auxiliaries of any kind, whom ARIANESPACE and/or the C.N.E.S. would call for in view of the preparation and the execution of the launching operations. 4. The European Space Agency "E.S.A." but only in its capacity as owner of certain facility and/or outfits located at the Centre Spatial Guyanais in Kourou and made available to ARIANESPACE and/or to the C.N.E.S. for the purpose of the preparation and the execution of the launches. 5. The firms, who have participated in the design and/or in the execution and/or who have provided the components of the Launch Vehicle, of its support equipment's including propellants and other products either liquid or gaseous necessary for the functioning of the said Launch Vehicle, their contractors, sub-contractors and suppliers. 6. Customer and Third Party Customer(s) of ARIANESPACE on whose behalf ARIANESPACE executes the launch services as well as their co-contractors and sub-contractors. 70 7. When they act in the scope of their activities, the Officers and Directors, the legal representatives, the Managing Director, the employees, agents as well as the interim staff employed by ARIANESPACE or by the ASSURED mentioned in hereabove Paragraphs from 1 to 6 (included). 15.2. Said insurance coverage shall come into effect as of the day of the Launch, and shall be maintained for twelve (12) months or for so long as all or any part of the Combined Space Vehicle remains in orbit, whichever period is shorter. 15.3. This insurance policy shall be taken out in the amount of 400,000,000 French Francs (four hundred million French Francs). During the period provided for in Paragraph 15.2. of this Article 15, ARIANESPACE undertakes to settle all liabilities, indemnify and hold Customer harmless for property damages and bodily harm caused to Third Parties by the Combined Space Vehicle or part thereof which shall exceed the amount covered by said insurance policy. At the expiration of the validity of said insurance policy in accordance with Paragraph 15.2. of this Article 15, Customer shall settle all liabilities for property damages and bodily harm caused to third parties by the Satellite or part thereof. 71 ARTICLE 16 OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION CONFIDENTIALITY/PUBLIC STATEMENTS 16.1. Title to all documents and written information furnished to Customer by ARIANESPACE or its Associates during the implementation of this Agreement shall remain exclusively with ARIANESPACE. 16.2. Title to all documents and written information furnished to ARIANESPACE by Customer or its Associates during the implementation of this Agreement shall remain exclusively with Customer or with said Associates as to their respective documents and written information. 16.3. Each Party shall use the documents and written information supplied to it by the other Party or the other Party's Associates solely to implement and perform this Agreement and related activities. 16.4. To the extent necessary for the implementation of this Agreement, each Party shall be entitled to divulge to its own Associates, attorneys and technical consultants and actual and proposed lenders, investors, insurers and successors in interest the documents and written information received from the other Party or from the other Party's Associates, provided that such receiving Parties have first agreed to be bound by nondisclosure and use restrictions that are comparable to those set forth in this Agreement. 16.5. Subject to the provisions of Paragraph 16.4. of Article 16 of this Agreement, each Party shall not divulge any and all documents and written information which it receives from the other Party or the other Party's Associates, but shall protect all such documents and written information which is marked with an appropriate and valid proprietary legend from unauthorized disclosure except as provided herein, in the same manner as the receiving Party protects its own confidential information, provided, however, that each Party shall, that each Party shall have the right to use and duplicate such documents and written information for any Party purpose subject to the nondisclosure requirements and use restrictions provided herein. 72 If the information disclosed by one Party to the other Party or by or to their respective Associates is deemed confidential by the disclosing Party or Associate and is verbal, not written, such verbal confidential information shall be identified prior to disclosure as confidential and, after acceptance by and disclosure to the receiving Party, shall be reduced to writing promptly, labeled confidential, but in no event later than twenty (20) days thereafter, and delivered to the receiving Party in accordance with this paragraph. 16.6. The obligation of the Parties to keep secret and confidential the documents and written information shall not apply to those documents and written information that : - are invalidity marked ; - are in the public domain or use ; - shall become in public use, by publication or otherwise, and due to no fault of the receiving Party ; - the receiving Party can demonstrate were legally in its possession at the time of receipt ; - are rightfully acquired by the receiving Party from third parties ; - are commonly disclosed by ARIANESPACE and/or its Associates ; - are inherently disclosed by any product or service marketed by ARIANESPACE or its Associates ; - are independently developed by the receiving Party ; - are approved for release by the written authorization of the disclosing Party ; or - are required, but only to the extent necessary, to be disclosed pursuant to governmental or judicial order, in which event the Party concerned shall notify the other Party of any such requirement and the information required to be disclosed prior to such disclosure. 16.7. The provisions of this Article shall remain valid after the term of this Agreement for whatever reason until said documents and written information become part of the public domain. 73 Each Party shall however be entitled to destroy documents and written information received from the other Party, or to return these documents or such written information to the other Party, at any time after Launch (or after Replacement Launch, if any). 16.8. The present Agreement and each part thereof shall be considered to be confidential by both Parties. Any disclosure of the same by one Party shall require the prior written approval of the other Party, which approval shall not be unreasonably withheld or delayed. Except for manifest publications, either Party shall obtain the prior written approval of the other Party only through such Party's authorized representative concerning the content and timing of news releases, articles, brochures, advertisements, speeches, and other information releases concerning the work performed or to be performed hereunder by ARIANESPACE and its Associates. Each Party agrees to give the other Party reasonable advance time for review of any material submitted to the other Party for approval under this paragraph. 74 ARTICLE 17 PERMITS AND AUTHORIZATIONS - GROUND STATIONS 17.1. The obligations of ARIANESPACE being limited to those provided for in Article 4 above, Customer shall be required to obtain all permits, authorizations, or notices of non-opposition from all national or international, public or private authorities having jurisdiction over the Satellite Mission. 17.2. Customer shall also obtain all government permits and authorizations regarding the transfer of the Satellite and its Ancillary Equipment from the country of origin to the Launch Base, and the availability of Satellite's ground stations. 17.3. ARIANESPACE agrees to assist and support Customer and its Associates, free of charge, with any administrative matters related to the importation into French Guiana of the Satellite and its Ancillary Equipment, and related to their preservation and possible repatriation, as well as to the entry, stay, and departure of Customer and its Associates. 75 ARTICLE 18 TERMINATION BY CUSTOMER 18.1. Customer shall be entitled to terminate any Launch under this Agreement at any time prior to Launch. Customer's right is not subject to any condition, and shall cover termination situations for reasons of convenience as well as those of delay or impossibility in which one of the Parties may find themselves. Notice of termination shall be given by registered letter with acknowledgment of receipt, and shall take effect upon receipt of such letter by ARIANESPACE or by way of telecopy with copy by registered letter with acknowledgment of receipt and shall take effect upon receipt of the telecopy by ARIANESPACE. 18.2. Whatever the reason for termination of a Launch other than a Reflight under this Article 18.0, ARIANESPACE shall be entitled to termination fees equal to the aggregate of the following: 18.2.1. A basic termination fee as follows: - --------------------------- ---------------------------------------------------- Effective Date of Termination Fees expressed in % of Launch Services Termination Price (LSP) - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [*********] ******] [***] - --------------------------- ---------------------------------------------------- [********* ******] [***] - --------------------------- ---------------------------------------------------- [********* ******] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- where: LSP means the Launch Services Price excluding any price increase resulting from the exercise of option(s) under Paragraph 8.1.2. and any mass increase. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 76 C means the date obtained by i) adding to the first day of the initial Launch Period (or, for Optional Launch #1 and Optional Launch #2, if applicable, the initial three month Launch Period defined within such Launch Period) for the Launch concerned the aggregate duration of Launch Period or Launch Slot postponement(s) requested by ARIANESPACE for such Launch pursuant to Sub-paragraph 11.3.1. of Article 11 AND ii) deducting the aggregate duration of acceleration(s) under Paragraph 11.5 of this Agreement. 18.2.2. Plus i) any other amount(s) beyond the L.S.P. paid or due (including postponement fees - late payment interest) for the Launch at the effective date of termination, and ii) the price of those Associated Services, ordered by the Customer after the signature of this Agreement for the Launch concerned and performed at the date of termination. 18.3. Notwithstanding the provisions of Paragraph 18.2. hereabove, Customer shall have the following termination rights: 18.3.1. If Customer decides irrevocably not to proceed to the launch of one or more of the PanAmSat Satellites covered by this Agreement, on any launch vehicle whatsoever and consequently Customer terminates this Agreement as to such Satellite(s), ARIANESPACE shall be entitled to termination fees equal to the aggregate of the following: 18.3.1.1. A basic termination fee as follows: - --------------------------- ---------------------------------------------------- Effective Date of Termination Fees expressed in % of Termination Launch Services Price (LSP) - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [********** ***] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- where: [***] Filed separately with the Commission pursuant to a request for confidential treatment. 77 LSP means the Launch Services Price excluding any price increase resulting from the exercise of options under Paragraph 8.1.2. and any mass increase. C means the date obtained by i) adding to the first day of the initial Launch Period: a) the aggregate duration of Launch Period or Launch Slot postponement(s) requested by ARIANESPACE for such Launch pursuant to Sub-paragraph 11.3.1. of Article 11 and b) the aggregate duration of postponements requested by Customer under Paragraph 11.2.1.5. AND ii) deducting the aggregate duration of acceleration(s) under Paragraph 11.5 of this Agreement. . 18.3.1.2. Plus i) any other amount(s) beyond the L.S.P. paid or due (including postponement fees - late payment interest) for the Launch at the effective date of termination, and ii) the price of those Associated Services, ordered by the Customer after the signature of this Agreement for the Launch concerned and performed at the date of termination. 18.3.1.3. In the event of termination by Customer under the present Paragraph 18.3.1., if Customer decides within five years of such termination to proceed to the launch of the Satellite the Launch of which was terminated under this Paragraph 18.3.1., the relevant Launch shall be reinstated automatically under this Agreement and the Parties undertake to negotiate in good faith necessary adjustments to be made to this Agreement and the payment terms contained therein in view of maintaining the net present value of the Launch Services Price. 78 18.3.2. If the Launch concerned is a Reflight, ARIANESPACE shall be entitled to termination fees equal to the aggregate of the following: 18.3.2.1. A basic termination fee as follows: - --------------------------- ---------------------------------------------------- Effective Date of Termination Fees expressed in % of Guarantee Amount Termination - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- [********* ******] [***] - --------------------------- ---------------------------------------------------- [*********] [***] - --------------------------- ---------------------------------------------------- where: C means the date obtained by i) adding to the first day of the initial Launch Period or Launch Slot as determined pursuant to Article 13 of this Agreement of the Reflight: a) the aggregate duration of Launch Period or Launch Slot postponement(s) requested by ARIANESPACE for such Launch pursuant to Sub-paragraph 11.3.1. of Article 11 and b) the aggregate duration of postponements requested by Customer under Paragraph 11.2.1.5. AND ii) deducting the aggregate duration of acceleration(s) under Paragraph 11.5 of this Agreement. * Notwithstanding the foregoing, if Customer terminates the Reflight no later than thirty days after the later of i) the date of order of said Reflight or ii) thirty days after the establishment of the cause of the Launch Failure and the scheduling of the resumption of launches of the Ariane 5 launch vehicle as notified by ARIANESPACE to Customer, the termination fee under this Paragraph 18.3.2.1. shall, independently of the initial Launch Period of said Reflight, be limited to [*********************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 79 18.3.2.2. Plus i) any other amount(s) paid or due (including postponement fees - late payment interest) for the Launch at the effective date of termination and ii) the price of those Associated Services, ordered by the Customer after the signature of this Agreement for the Launch concerned and performed at the date of termination. 18.3.3. Notwithstanding the fo3regoing, if a Reflight performed by an Ariane 5 Launch Vehicle results in a Launch Failure, Customer shall have the right, within the later of i) ninety (90) days of the day the Parties have agreed on the Launch Failure or ii) thirty days after the establishment of the cause of the Launch Failure and the scheduling of the resumption of launches of the Ariane 5 Launch Vehicle as notified by ARIANESPACE to Customer to terminate the Reflight of the Reflight under this Paragraph 18.3.3. In this case, the Parties agree that ARIANESPACE shall reimburse to Customer an amount equal to [************************************************** ******************************************************************* *********************************************] 18.4. Termination fees are due by the Customer to ARIANESPACE as of the effective date of termination and payable within thirty (30) days of the receipt by the Customer of the corresponding invoice. Any amount paid by the Customer for the Launch concerned (including, if applicable, any Option Credit) in excess of the termination fees shall be refunded by ARIANESPACE to the Customer within thirty (30) days of the effective date of termination. For the purpose of this Paragraph 18.4., in the case of a Reflight, the Guarantee Amount shall be deemed to be a payment and the sole payment made by the Customer. [************************************************************************* ************************************************************************** ************************************************************************** ************************************************************************** ************************************************************************** ************************************************************************** ***********************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 80 18.5. Notwithstanding the foregoing, in the event that the aggregate of all postponements for a given Launch (other than postponement due to Events of Force Majeure up to a period of six months for each Launch as provided under Paragraph 11.3.5. of Article 11 of this Agreement) requested by ARIANESPACE under Paragraph 11.3. of Article 11 of this Agreement should result in ARIANESPACE delaying a Launch under this Agreement by more than twelve (12) months, excluding delays due to Events of Force Majeure and after deduction of the aggregate duration of acceleration(s) under Paragraph 11.5 of this Agreement, Customer shall have the right, within ninety (90) days of the receipt of the corresponding ARIANESPACE notice for postponement or if no such notice is given, at the date at which the aggregate of ARIANESPACE postponements for the forthcoming Launch exceeds twelve months, to terminate the relevant Launch. ARIANESPACE shall promptly refund to Customer all payments made by Customer for said Launch. In such an event, Customer shall be liable only for the payment of Associated Service(s) performed prior to the date of termination. For the purpose of this Paragraph 18.5., in the case of a Reflight, the Guarantee Amount shall be deemed to have been a payment and the sole payment made by Customer. 18.6. If Customer does not exercise Optional Launch #1 by 30 June 1999 and/or Optional Launch #2 by 31 December 1999, ARIANESPACE shall reimburse to Customer the Option Price which was not the object of an applied Option Credit under Paragraph 10.1.1.B) or C). For the avoidance of doubt, except for any portion of the Option Fee that may not be the object of a refund to Customer under the terms of this Agreement, Customer shall have no termination liability vis-a-vis any Optional Launch for which an Option is not exercised. 81 ARTICLE 19 TERMINATION BY ARIANESPACE 19.1. In the event that Customer fails to comply with its payment obligations pursuant to the payment schedule and other payment dates set forth in this Agreement, and does not pay within thirty (30) days of the receipt of a notice to that effect, ARIANESPACE shall be entitled to terminate the Launch concerned by registered letter with acknowledgment of receipt. 19.2. In the event of termination pursuant to the provisions of this Article 19, the provisions of Paragraph 18.2. of Article 18 of this Agreement shall be applicable. 82 ARTICLE 20 MISCELLANEOUS 20.1. Working language Any communication by one Party to the other shall be made in English. All communications between Customer and its Associates on the Launch Base, as well as all communications between ARIANESPACE or its Associates on the Launch Base with Customer's personnel and/or that of its Associates, shall be made in English. 20.2. Notices Unless expressly provided otherwise under this Agreement, all communications and notices to be given by one Party to the other in connection with this Agreement shall be in writing and in the language(s) of this Agreement and shall be sent by registered mail, or transmitted by telex telegram or facsimile and confirmed by registered letter. The following addresses have been designated : ARIANESPACE : Immeuble Ariane Boulevard de l'Europe 91000 Evry FRANCE 83 Customer : PanAmSat Corporation One Pickwick Plaza Greenwich, Connecticut, 06830 U.S.A. Attention: Mr. Frederick LANDMAN, President and CEO or such other address or other persons attention as either Party may modify in accordance with this Paragraph. 20.3. Waiver Waiver on the part of either ARIANESPACE or Customer of any term, provision, or condition of this Agreement shall only be valid if made in writing and accepted by the other Party. Said acceptance shall not obligate the Party in question to waive its rights in connection with any other previous or subsequent breaches of this Agreement. 20.4. Headings The headings and sub-headings used in this Agreement are provided solely for convenience of reference, and shall not prevail over the content of the Articles of this Agreement. 84 20.5. Assignment Customer shall not be entitled to assign all or part of its rights and obligations under this Agreement without the prior written consent of ARIANESPACE which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, ARIANESPACE's consent shall not be required for any assignment of this Agreement by Customer to a reorganized entity (which may include additional investors) to which all or substantially all of the assets of the Customer are also assigned. Customer shall promptly notify ARIANESPACE of any such assignment. In addition, launch rights may be purchased hereunder by Customer's subsidiary, PanAmSat International (formerly the "Customer" hereunder) for its own account. Such purchase shall be treated the same way as Customer's purchases hereunder, counting both toward the number of available options hereunder and for and for multilaunch purposes discounts, the only difference being that the rights to particular launches purchased by PanAmSat International and the obligations to make payment for such launches shall reside solely with PanAmSat International. With respect to the foregoing it is agreed that "Customer's" rights and obligations to "Firm Launch #1" belong to PanAmSat International and the rights and obligations to Firm Launch #2 remain with Customer. 85 20.6. Entire Agreement and Modifications The Contractual Documents as amended at the date hereof comprise the entire understanding between the Parties with respect to the subject of this Agreement, superseding all prior and contemporaneous discussions between them. Neither Party shall be bound by the conditions, warranties, definitions, statements, or documents previous to the execution of this Agreement, unless this Agreement makes express reference thereto. Any undertakings subsequent to the execution of this Agreement shall be made in writing and signed by duly authorized representatives of each of the Parties and shall expressly state that it is such an amendment or modification. 20.7. Registration of Customer's Satellite In accordance with the Convention on Registration of Objects Launched into Outer Space of U.N.O., Customer: i) if a state or consortium of states, shall register the Satellite, or ii) if not a state or consortium of states, shall obtain registration of the Satellite through the state or a state which has jurisdiction over Customer. 86 ARTICLE 21 APPLICABLE LAW This Agreement shall govern the relationship between the Parties as to the subject of this Agreement. To the extent the Parties have failed to address any question arising hereunder, or in the event of the need for any interpretation of any term of this Agreement, French law shall be applied, unless it is contrary to the explicit terms or the underlying common intentions of the Parties to this Agreement. 87 ARTICLE 22 ARBITRATION In the event of disputes arising in connection with this Agreement, the Parties undertake to use their best efforts to reach an amicable settlement. If an amicable settlement cannot be achieved, the dispute shall be referred to the President of ARIANESPACE and of Customer, who will use their best efforts to reach an agreement acceptable to both Parties. Should an amicable settlement prove impossible, the dispute(s) shall be finally settled under the rules of Conciliation and Arbitration of the international Chamber of Commerce (I.C.C.) in Geneva, Switzerland by three arbitrators appointed in accordance with the then existing rules. The Arbitration shall be conducted in the English language. The award of the Arbitrators shall be final and binding, and execution thereof may be entered in any court having jurisdiction. 88 ARTICLE 23 EFFECTIVE DATE This Agreement shall take effect after signature by the two Parties. Executed On , 1998. In 2 originals ARIANESPACE CUSTOMER - ---------------------------- ---------------------------- 89 P A R T II A N N E X E S 90 ANNEX 4 E.S.A./ARIANESPACE Convention (Extract) Certain European Governments, members of the European Space Agency, (hereinafter referred to as "the Participants") have committed themselves to using the Ariane Launcher, developed within the framework of the European Space Agency programs. Arianespace must provide the European Space Agency and the Participants, as a priority, with the services and launch slots necessary for their programs. Arianespace must also make sure that in the event of a shift in the launch slots caused by the launcher system and/or any of the technical equipment which has to be used for the launch, the payload concerned of the Agency or Participant retains its position in the launch schedule. In addition, in the event of the failure of an Agency or Participant mission, the Agency or Participant may ask Arianespace to provide them, for a new launch, with the first or failing that the second launch slot compatible with the availability of the replacement payload if the failure was due to the launch system and/or any of the technical equipment used for the launch, and the first compatible slot or failing that the first slot scheduled at the latest 10 months after the written relaunch request if the failure was due to the payload itself. Finally, Arianespace has committed itself to the Agency and to the Participants to pay particular attention to the specific requirements imposed by scientific missions. 91 Confidential ARIANESPACE PROPRIETARY PanAmSat MultiLaunch Amdt 3/ 95.5.933 Page PAGE \* ARABE1 Confidential ARIANESPACE PROPRIETARY 92 EX-10 5 EXHIBIT 10.15.6 Exhibit 10.15.6 ARIANESPACE CONFIDENTIAL AND PROPRIETARY This Amendment #1 to the Side Letter to the Launch Services Agreement 95.5.933 between the Parties is entered into between: ARIANESPACE S.A., a company organized under the laws of France and having its principal office at Boulevard de l'Europe, 91006 EVRY, France. and PanAmSat Corporation a company organized under the laws of the State of Delaware with principal offices located at One Pickwick Plaza, Greenwich, Connecticut, U.S.A. Reference is made to the Launch Services Agreement 95.5.933 executed between PanAmSat Corporation and ARIANESPACE on December 20th, 1995, for the Launch of PanAmSat Satellites (said Agreement being hereinafter referred to as the "Agreement" and the Launches covered under said Agreement being hereafter referred to as the "Launches"). On December 20th 1995, the Parties entered into a side letter to the Agreement ("the Side Letter"). This Amendment #1 to the Side Letter amends and replaces the terms of the Side Letter. The two Parties agree that the conditions listed hereafter shall be applicable to the Launches. Unless otherwise indicated, words defined under the Agreement shall have the same meaning in the present Amendment #1 to the Side Letter. I. In order to give PanAmSat greater schedule flexibility, the Agreement foresees the use of either the Ariane 4 or the Ariane 5 Launch Vehicles to perform the Launches. The Parties agree that the Ariane 5 Launch Vehicle shall be the preferred Launch Vehicle for the Launches and that ARIANESPACE shall use its best efforts to affect Ariane 5 Launch Vehicles to the Launches under the terms and conditions of the Agreement. 1 II. If despite these efforts, ARIANESPACE is unable to affect an Ariane 5 Launch Vehicles to any of the Launches within the contractual launch schedule provided for under the Agreement, ARIANESPACE shall inform PanAmSat as soon as possible and PanAmSat shall have the option to wait for the next scheduled Ariane 5 Launch Vehicle for which there is a Launch Possibility or have the relevant Satellite Launched as scheduled on an Ariane 4 Launch Vehicle. In the event that ARIANESPACE shall be obliged to postpone the launch of a satellite of another client of ARIANESPACE ("Third Party Launch") in order to make available a Launch Possibility for Customer's Satellite, then, in determining which satellite to retain on such Third Party Launch, ARIANESPACE shall retain the satellite which is compatible in size with PanAmSat's Satellite or, if two or more satellites on such Third Party Launch are compatible in size and in class with PanAmSat's Satellite, ARIANESPACE shall apply the criteria numbered (1) to (3) inclusive in, and in the order which is set out in Sub-paragraph 11.3.2. of this Article 11 of the Agreement. III. [******************************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 2 IV. Notwithstanding the provisions of Paragraphs I to III above, the Parties agree that: a) Paragraph I to III shall not be applicable to Firm Launch #2 under the Agreement if said Launch is accelerated under the provisions of Paragraph 11.5 of the Agreement to a date prior to 1 January 1999, and b) *************************************************************************** *************************************************************************** *************************************************************************** ************************************] V. Notwithstanding the terms of Paragraphs 4.1.5 and 13.1.5 of the Agreement, in the event that, under the Agreement and/or this Side Letter, PanAmSat shall be entitled to a Reflight for an initial Satellite of a baseline mass of 3450 kg, Customer shall, at the time of order of the Reflight, have the right to increase the mass of the Satellite object of the Reflight up to a baseline mass of 4500 kg. Said increase in mass shall be subject to the payment of a sum of [***** **********************] ("the Optional Mass Price"). This sum shall be due and payable at the time of order of the Replacement Launch. The Optional Mass Price is valid for a Launch to take place prior to 1 April 1999 and for Launches beyond this date, this price shall be increased by a factor of [**************] per the number of calendar quarters or portion thereof between 1 April 1999 and the first day of the initial Launch Period for the Reflight. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 VI. [******************************************************************************* *******************************************************************************] [******************************************************************************] [******************************************************************************* ******************************************************************************** ********************] [******************************************************************************* ******************************************************************************** ******************************************************************************** ************************************************************] [******************************************************************************* ******************************************************************************** *******************************************************************] [******************************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** *****************************] VII. The Parties agree that in the event that PanAmSat declines an available Ariane 4 Launch Vehicle proposed by ARIANESPACE in order to wait for an Ariane 5 Launch Vehicle under the provisions of Paragraph II hereof, the delay between the Ariane 4 Launch Period or Launch Slot and the Ariane 5 Launch Period or Launch Slot shall not be considered to constitute a postponement of the Launch by either Party within the meaning of Article 11 of the Agreement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 4 VIII. This Side Letter constitutes an amendment to the Agreement within the meaning of its Paragraph 20.6 and the terms of this Side Letter shall prevail in the event of any inconsistency with the terms of the Agreement. This Side Letter shall remain confidential and unless indicated expressly otherwise, authorization to disclose the Agreement shall not include authorization to disclose this Side Letter. Executed this 8th day of January, 1998. FOR ARIANESPACE FOR PANAMSAT CORPORATION 5 EX-10 6 EXHIBIT 10.15.7 Exhibit 10.15.7 Confidential - Arianespace Proprietary "This Amendment #4 to the Launch Services Agreement 95.5.933 is entered into between: ARIANESPACE S.A., a company organized under the laws of France and having its principal office at Boulevard de l'Europe, 91006 EVRY, France. AND PanAmSat Corporation a company organized under the laws of the State of Delaware with principal offices located at One Pickwick Plaza, Greenwich, Connecticut, U.S.A. (hereinafter referred to as "PanAmSat Corporation") and PanAmSat International a company organized under the laws of the State of Delaware with principal offices located at One Pickwick Plaza, Greenwich, Connecticut, U.S.A. (hereinafter referred to as "PanAmSat International") Reference is made to the Launch Services Agreement 95.5.933 executed between PanAmSat Corporation and ARIANESPACE on December 20, 1995 for the Launch of up to four PanAmSat Satellites as amended (said agreement being hereinafter referred to as the "Agreement"). The Parties hereby amend the Agreement as follows: ARTICLE 1 CONDITIONS APPLICABLE TO FIRM LAUNCH #1 A) The Parties hereby define by mutual agreement the Redefined Launch Slot for Firm Launch #1 as follows: From 1 October 1998 up to and including 31 October 1998 B) Notwithstanding the terms of the Agreement, until 1 April 1998, PanAmSat shall have the option to increase the mass of the Satellite of Firm Launch #1 to 3800 kg (without adaptor). The price for this increase in mass shall be [************] which, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 1 notwithstanding the provisions of Paragraph 10.3.1. of the Agreement, shall be paid no later than 15 April 1998. For greater certainty, it is hereby specified that his price shall not be subject to the price reduction under Paragraph 8.1.1.D) of the MLSA. Provided that the Launch takes place no later than 1 April1999, this Launch will be performed by way of a dedicated Ariane 44LP Launch Vehicle and PanAmSat International shall be entitled to exercise its rights under Paragraph 8.1.3.A) iii) of the Agreement. If the Launch takes place after said date ARIANESPACE and PanAmSat International shall discuss in good faith if this mass increase will be maintained taking into consideration their respective interests and the corresponding price adjustment provided that if ARIANESPACE allocates a dedicated Ariane 4 Launch Vehicle, PanAmSat International shall also be entitled to exercise its rights under Paragraph 8.1.3.A) iii) of the Agreement. ARTICLE 2 FIRM LAUNCH #3 A) A Firm Launch #3 is hereby added to the Agreement for the PAS 6B Satellite. Using the priority allocation for a Replacement Launch Slot for PAS 6, the Launch Slot allocated to this Launch will be: from 1 October 1998 up to and including 31 October 1998. Optional Launches #1 and #2 will remain available to Customer. B) The Launch Services Price for this Firm Launch #3 under Paragraph 8.1.1. of the Agreement shall be a price of [******************************************** **********************] for a mass of 3475 kg. This Launch Services Price shall be paid by Customer as follows: - 15 March 1998* [************] - 1 August 1998 [*****************] * This amount shall have been received by ARIANESPACE on 15 March 1998 or ten days after execution of the present amendment to the Agreement, whichever is the latest notwithstanding the provisions of Paragraph 10.3.1. of the Agreement. ** At the date of execution of this amendment, the price reduction under Paragraph 8.1.1.D) of the Agreement equals [**********]. The applicable price reduction shall be deducted from this payment. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 2 ARTICLE 3 PRICE REDUCTIONS UNDER PARAGRAPH 8.1.1.D) OF THE AGREEMENT Paragraph 8.1.1.D) of the Agreement is hereby replaced by the following: D) The Launch Services Prices stated under Paragraphs A), B), and C) under Subparagraph 13.2.2. hereafter above shall be subject to a price reduction as follows: i) For Firm Launch #1: [***********************************************] ii) For Firm Launch #2: [***********************************************************] iii) For Firm Launch #3 [************************************************************] iv) For Optional Launch #1: a) if the Launch Option is exercised on or prior to 1 March 1999: [**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as increased for the initial Launch Period of Optional Launch #1), as applicable, or b) if the Launch Option is exercised after 1 March 1999: [**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as increased for the initial Launch Period of Optional Launch #1), as applicable. v) For Optional Launch #2: a) if Optional Launch #1 has been exercised or a Replacement Launch has been ordered on or prior to 1 March 1999, at the date of exercise of Optional Launch #2 and provided Optional Launch is exercised on or prior to 1 March 2000: the percentage applicable to Optional Launch #1 under Subparagraph iii) above or, if applicable, to the Replacement Launch, plus [**] times the Launch Services [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 Price under Subparagraph 8.1.1.C) i) or ii) as applicable (as increased for the initial Launch Period of Optional Launch #2), or b) in all other cases: [**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) (as applicable and as increased for the initial Launch Period of Optional Launch #2). vi) For Replacement Launches ordered under this Agreement: Provided that the Replacement Launch is ordered no later than 31 December 2001, the percentage applicable to the last Launch ordered under this Agreement (including Replacement Launches) plus [**] times the applicable Launch Services Price under Article 13. Further, if a Replacement Launch is ordered on or prior to 1 March 1999, any further option(s) exercised hereunder shall be subject to a price reduction determined under Subparagraph 8.1.1.D)iv) above. The price reduction as calculated under this Sub-paragraph 8.1.1.D) shall be deducted from the payment due at L-9 months and, if the price reduction exceeds this payment, the excess price reduction shall be deducted equally from the payments at L-8 months and at L-10 months under Paragraph 10.1.1. A), B) or C) as applicable. Notwithstanding the foregoing, for Firm Launch #3, the price reduction shall be deducted from the payment due on 1 August 1998. Furthermore, notwithstanding the foregoing, in the event a Launch ordered under this Agreement is terminated, the Price Reduction of the other Launches ordered shall be recalculated to take into account such termination by deducting two percent from all Launches ordered after the date of order of the Launch terminated. Notwithstanding the foregoing, the price reduction under this Sub-paragraph 8.1.1.D) may not in any case exceed [**] of the relevant Launch Services Price under Paragraph 10.1.1A), B) or C) or for Firm Launch #3 under the provisions of Article 2 of this Amendment for any Launch under this Agreement ARTICLE 4 PRICE ESCALATION FORMULA The Parties agree to discuss in good faith no later than three weeks after execution of this Amendment the precise index to be applied for the application of Index 0 under Paragraphs 9.1.A) and B) of the Agreement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 4 ARTICLE 5 Paragraph 20.5 of the Agreement shall be replaced by the following: 20.5. Assignment Customer shall not be entitled to assign all or part of its rights and obligations under this Agreement without the prior written consent of ARIANESPACE which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, ARIANESPACE's consent shall not be required for any assignment of this Agreement by Customer to a reorganized entity (which may include additional investors) to which all or substantially all of the assets of the Customer are also assigned. Customer shall promptly notify ARIANESPACE of any such assignment. In addition, launch rights and corresponding obligations may be purchased hereunder by Customer's subsidiary, PanAmSat International (formerly the "Customer" hereunder) for its own account. Such purchase shall be treated the same way as Customer's purchases hereunder, counting both toward the number of available options hereunder and for multilaunch purposes discounts, the only difference being that the rights to particular Launches purchased by PanAmSat International and all obligations under this Agreement pertaining to such Launches shall reside solely with PanAmSat International. With respect to the foregoing it is agreed that "Customer's" rights and obligations to "Firm Launches #1 and #3" belong to PanAmSat International and the rights and obligations to Firm Launch #2 remain with Customer. 5 ARTICLE 6 This Amendment #4 constitutes an amendment to the Agreement within the meaning of its Paragraph 20.6. Executed this 9th day of March 1998 For ARIANESPACE For PanAmSat Corporation: By: By: Title: Title: For PanAmSat International By: Title: 6 EX-10 7 EXHIBIT 10.15.8 Exhibit 10.15.8 Confidential - Arianespace Proprietary This Side Letter #2 to the Launch Services Agreement 95.5.933 between the Parties is entered into between: ARIANESPACE S.A., a company organized under the laws of France and having its principal office at Boulevard de l'Europe, 91006 EVRY, France. AND PanAmSat Corporation a company organized under the laws of the State of Delaware with principal offices located at One Pickwick Plaza, Greenwich, Connecticut, U.S.A. (hereinafter referred to as "PanAmSat Corporation") and PanAmSat International a company organized under the laws of the State of Delaware with principal offices located at One Pickwick Plaza, Greenwich, Connecticut, U.S.A. (hereinafter referred to as "PanAmSat International") Reference is made to Amendment #1 to the Side Letter to Launch Services Agreement 95.5.933 executed between PanAmSat Corporation and ARIANESPACE on December 20, 1995, for the Launch of PanAmSat Satellites (said Agreement being hereinafter referred to as the "Agreement" and the Launches covered under said Agreement being hereafter referred to as the Launches and said Amendment #1 to the Side Letter dated 8 January 1998 being hereinafter referred to as "Side Letter #1"). All capitalized terms herein shall have the same meaning as under the Agreement. On this day, the Parties have entered into Amendment #4 to the Agreement in order to add a Firm Launch #3 to the Agreement. The Parties agree that the conditions listed hereafter shall be applicable notwithstanding the terms of the Agreement or of the Side Letter #1. Unless otherwise indicated, words defined under the Agreement shall have the same meaning in the present Side Letter. I. Launch Slots of PAS 7 and 6B under the MLSA The Parties recognize that although the PAS 7 Launch and the PAS 6B Launch are both allocated Launch Slots in October 1998, only one of these two Launches may take place during the same calendar month. In view of the delays in the manufacturing of PAS 7 which have lead to subsequent reschedulings of the Launch Slot, it is the intention of the Parties to Launch these two Satellites as soon as possible taking into consideration the date of availability of the Satellites and the available Launch Opportunities. Both Parties shall therefore consult regularly on Launch Opportunities and the date of availability of the Satellites and shall use their best efforts in order to accelerate either Launch to a Launch Slot beginning prior to 1 October 1998. More specifically, no later than 15 April 1998, the Parties will explore the possibility of accelerating either one of these two Launches under the provisions of Paragraph 11.5. of the MLSA to a Launch Slot in August 1998 (as previously foreseen for PAS 7 prior to Satellite manufacturing delays) in order to leave the October Launch Slot available for the other Launch. Should these efforts fail, the Parties shall meet no later than 15 June 1998 in order to discuss the progress of the manufacturing of the PAS 6B and 7 Satellites. The Launch Slot will be attributed to the Satellite designated by PanAmSat International among these two Satellites no later than 1 July 1998. The other Launch will automatically be rescheduled by mutual agreement of the Parties to a Launch Slot extending from 1 December 1998 up to and including 31 December 1998, or, if possible to an earlier Launch Slot taking into consideration the date of availability of the Satellites and the available Launch Opportunities. ARTICLE 2 SPECIAL PROVISIONS FOR FIRM LAUNCH #3 The provisions of Articles I. to IV. of the Side Letter #1 shall not apply to Firm Launch #3 under the Agreement and said Firm Launch #3 shall not be taken into consideration for the application of said provisions. [******************************************************************************* ******************************************************************************** ******************************************************************************** ********************************************************************] ARTICLE 3 This Side Letter constitutes an amendment to the Agreement within the meaning of its Paragraph 20.6 as well as an amendment to the Side Letter #1 and the terms of this Side Letter shall prevail in the event of any inconsistency with the terms of the Agreement or with the terms of Side Letter #1. This Side Letter shall remain confidential and unless indicated expressly otherwise, authorization to disclose the Agreement shall not include authorization to disclose this Side Letter. Executed this 9th day of March, 1998. FOR ARIANESPACE FOR PANAMSAT CORPORATION _____________________________________ ____________________________________ FOR PANAMSAT INTERNATIONAL __________________________________ [***] Filed separately with the Commission pursuant to a request for confidential treatment. EX-10 8 EXHIBIT 10.18.3 Exhibit 10.18.3 March 5, 1998 The News Corporation Limited New York, New York Globo Comunicacoes e Participacoes, S.A. Rio de Janeiro, Brazil Grupo Televisa, S.A. Mexico City, Mexico PanAmSat International Systems, Inc. Greenwich, Connecticut Gentlemen: Reference is made to that certain letter agreement dated February 29, 1996, as amended, by and among the entities recipients to this letter (also referred to herein as the "parties") identified above (the "Letter Agreement"). In that connection, the parties acknowledge and, to the extent that it may be required, consent to the following: (1) PanAmSat International Systems, Inc., formerly known as PanAmSat Corporation ("PanAmSat") and NetSat Servicos Ltda. (an entity that is owned by The News Corporation Limited ("News"), Globo Comunicacoes e Participacoes, S.A. ("Globo"), and Tele-Communications International Inc. ("TINTA")) are about to enter into a "Second Amended and Restated Transponder Purchase and Sale Agreement," substantially in the form that has been reviewed by the parties or their representatives (the "Brazil Agreement"); (2) PanAmSat and Sky Multi-Country Partners, previously referenced as Multi-Country Partners GP (an entity that is owned by News, Globo, TINTA, and Grupo Televisa, S. A. ("Televisa")), are about to enter into a "Transponder Service Agreement," substantially in the form that has been reviewed by the parties or their representatives (the "Multi-Country Agreement"); (3) The parties understand and agree that the combination of the Brazil Agreement and the Multi-Country Agreement (together the "PAS-6 Agreements"), supersedes the Letter Agreement as to PAS-3 and PAS-6 and the rights and obligations of the parties to the Letter Agreement relative thereto, but that the rights and obligations of the parties to the Letter Agreement relative to PAS-5, except as expressly set forth below, are unaffected and remain binding. (4) The parties acknowledge and agree that [*********************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ***********************************************] This letter 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. Please indicate your agreement of the foregoing by signing in the appropriate place indicated below. Notarized: THE NEWS CORPORATION LIMITED By: Its Notarized: GLOBO COMUNICACOES E PARTICIPACOES, S.A. By: Its [***] Filed separately with the Commission pursuant to a request for confidential treatment. Notarized: GRUPO TELEVISA, S.A. By: Its and By: Its and By: Its Notarized: PANAMSAT INTERNATIONAL SYSTEMS, INC. By: Its EX-10 9 EXHIBIT 10.25.1 Exhibit 10.25.1 EXECUTION COPY AMENDMENT This Amendment (the "Amendment") is entered into as of this 5th day of March, 1998, by and between PanAmSat International Systems, Inc., a Delaware corporation, formerly known as PanAmSat Corporation ("PanAmSat") and Televisa, S.A. de C.V., a sociedad Anonima de Capital Variable, formed under the laws of the United Mexican States ("Customer"). This Amendment amends that certain "Full-Time Transponder Service Agreement from PAS-3 (European Beam)" dated as of September 20, 1996, by and between the parties hereto (the "Agreement"). This Amendment is being entered contemporaneously with that certain Transponder Service Agreement by and between PanAmSat and Sky Multi-Country Partners, previously referenced as Multi-Country Partners, GP ("Multi-Country," the "Multi-Country Agreement"). MATTERS AMENDED In consideration of the foregoing and of the mutual promises set forth below, and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, PanAmSat and Customer mutually agree that the following provisions of the Agreement are amended or added, as applicable. Sections referenced correspond to the Agreement and replace the Sections of the corresponding numbers (if any) in the Agreement: 1.2 Beam and Transponder Designation. The Beams, and subject to Section 5.3 and Appendix C, the particular Transponders upon which Customer shall be provided Service (the "Service Transponders") are shown in Appendix A. It is hereby acknowledged that through October 31, 1997, the Service Transponders were the following three (3) Transponders: 7, 11, and 15 (all Europe downlink Beams), and that, effective as of November 1, 1997, the Service Transponders were changed to the following five (5) Ku-band Transponders: 6, 10, 11, 13, and 14. At Customer's request, Transponders 6, 10, 13, and 14 have or will be switched into the NSA or SSA downlink Beams of PAS-3 to accommodate the requirements of Multi-Country. In addition, in circumstances under which Multi-Country would have the right to have the uplink Beam changed if the same Service was supplied to it by PanAmSat under the Multi-Country Agreement, at Customer's request (based upon Multi-Country's request to it) the uplink Beam will be changed for the applicable Transponder(s). When Multi-Country is no longer entitled to the use of these Transponders under its sublease agreement with Televisa, Televisa shall so notify PanAmSat (the "End of the Multi-Country Availability 1 Requirement"), and these Transponders will be switched to the Europe or North America downlink Beams, as applicable, and, if applicable, the uplink Beams back to the Europe/North America Beam. The foregoing notwithstanding, at Customer's request, PanAmSat shall leave the Transponders in the configuration established for Multi-Country under the preceding paragraph, provided that: (a) such configuration shall only be permitted to be used for the transmission of "Customer's Television Service" with the definition of "Commonly Controlled Entities" (other than Multi-Country) limited to entities in which there is a minimum of 50.1% common equity ownership with Customer; and (b) PanAmSat may require the Transponders to be switched to the configuration shown in Appendix A (without regard to the footnotes) at any time on notice to Customer if such a switch is necessary to allow the use of the frequencies by another satellite without interference to or from that satellite (or its use), at PanAmSat's desired location of use. The restrictions set forth in this paragraph shall not apply, and Customer's use of the Transponders as configured for the benefit of Multi-Country shall be subject to the other more general provisions of this Amendment and the Agreement, if PanAmSat is technically unable to switch the Transponders back to the configuration shown in Appendix A (without regard to the footnotes) at the End of the Multi-Country Availability Requirement; provided that, within sixty (60) days of PanAmSat's determination that such Transponder(s) cannot be switched, PanAmSat shall have the right, on notice to Customer to terminate this Agreement as to one or more of such unswitchable Transponders. No other switching of downlink Beams (or uplink beams) shall be permitted without PanAmSat's express written consent. All changes of downlink Beams are subject to the following additional requirements: (a) If the change cannot be accomplished using reasonable engineering standards, this Agreement shall continue to operate with the Service Transponders in their then-existing configuration without the contemplated change; (b) If the change was expressly authorized by the first paragraph of this Section 1.2 (i.e., as to the downlink Beams to NSA or SSA to accommodate Multi-Country and back to Europe or North America when no longer needed for Multi-Country, or, if applicable, as to the change of uplink Beams to accommodate Multi- 2 Country if it would be permitted under the Multi-Country Agreement and back to the Europe/North America uplink Beam when no longer required by Multi-Country), Then, as to a change of downlink Beams, PanAmSat shall bear the risk of loss if the Service Transponder(s) is damaged or made unusable as a result of attempting to make such change (i.e., if the Service Specifications for such Transponder can no longer be met in any configuration, the provisions of this Agreement that apply to a failure of a Service Transponder on a Confirmed Basis shall apply) and, as to a change of uplink Beams, PanAmSat shall bear such risk if it would have had such risk if the Service had been supplied by it to Multi-Country under the Multi-Country Agreement; and (c) Except as provided in the preceding clause (b), Customer shall accept the risk of loss if a Service Transponder(s) is damaged or made unusable as a result of attempting to make any further switch to which PanAmSat may consent (i.e., the Service Transponder shall not be deemed to have failed on a Confirmed Basis). 1.2A. Beam Election. Implemented. 1.3A Additional Use Restrictions. Customer acknowledges and agrees that, notwithstanding anything in this Agreement to the contrary, its use of any Transponder in the SSA, NSA, or North America downlink Beams of PAS-3 (and all uses that may be permitted under this Agreement) shall be subject to all of the [******************************************************************************* ******************************************************************************** ******************************************************************************** **************************************]. 1.5 Interim Marketing of the Capacity. (a) If neither Customer nor Multi-Country requires all of the capacity provided hereunder, until the End of the Multi-Country Availability Requirement, upon Customer's request, PanAmSat shall use all reasonable efforts to market services for occasional use from the Service Transponders (which Customer would thereafter cease to employ) on a rolling sixty (60) day cycle, subject to recall by Customer on sixty-five (65) days' notice (but subject to preemption on twenty-four (24) hours notice if required by [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 Customer for Multi-Country [******************************************] to other 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. In such event, PanAmSat shall credit against Customer's next monthly Service Fee (which shall continue to be payable) [********************************************* ******************************************************************************** ******************************************************************************** ******************************************************************] In addition, after deducting [*******] specified above, if the monthly service fees actually received by PanAmSat for service from the Service Transponders exceed the monthly Service Fees to be paid to PanAmSat by Customer for the remarketed capacity (the "Excess Amount") in addition to crediting the next month's Service Fee payment, [*****************************************************]. 1.6 Additional Marketing of Excess Capacity. (a) At Customer's written request (an "Availability Notice"), which may be given at any time after the End of the Multi-Country Availability Requirement, PanAmSat shall use all reasonable efforts to market services from one or more of the Service Transponders (which Customer would thereafter, on a minimum of thirty (30) days' notice from PanAmSat, or such lesser period of notice as Customer may agree in writing, cease to employ), as shall be designated in the Availability Notice to other potential customers on a full-time, full transponder basis 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. In such event, (i) PanAmSat shall actively market services from the Service Transponders in good faith provided that PanAmSat shall not be obligated to use the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 4 Service Transponders ahead of any other capacity that PanAmSat may also have available for comparable service. Unless otherwise agreed by both parties, the marketing shall be for full-time, fixed term uses. 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 (ii) PanAmSat shall credit against Customer's next monthly Service Fee (which shall continue to be payable) [***************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** **********************] In addition, after deducting [*******] specified above, if the monthly Service Fees actually received by PanAmSat for service from the Service Transponders exceed the monthly Service Fees to be paid to PanAmSat by Customer for the remarketed capacity (the "Excess Amount") in addition to crediting the next month's Service Fee payment, [*************************** *************************************] (b) At any time that is six months or more after the date that Customer shall have given an unwithdrawn Availability Notice, Customer shall be permitted on notice to PanAmSat to replace an Availability Notice with a "Sublease Notice" as to such Service Transponder(s) that had been subject to the Availability Notice. Upon giving of such a notice, subject to any customer agreements that PanAmSat may have entered under and consistent with the Availability Notice, Customer shall be permitted to sublease such Service Transponder capacity itself to third parties on a full-time, full transponder basis, subject to the following conditions: (i) Any such sublease shall be subject to PanAmSat's prior written consent; provided that such consent shall not be unreasonably withheld or delayed, it being understood that PanAmSat may withhold its consent only if: [***] Filed separately with the Commission pursuant to a request for confidential treatment. 5 (A) PanAmSat determines in good faith, that some or all of the sublease's programming (information about which Customer shall provide to PanAmSat upon PanAmSat's request) may be pornographic, involve religious fanaticism or political advocacy, obscene, indecent, slanderous, or in violation of any governmental programming restrictions; or (B) PanAmSat was demonstrably already engaged in marketing other PanAmSat capacity with comparable coverage ("Comparable Capacity") to the required sublessee(s), evidence of which (which, if in writing, may be excised to protect proprietary information and, if oral, will be summarized by PanAmSat) shall be provided to Customer by PanAmSat at Customer's written request; (ii) Any marketing by Customer to potential sublessees shall be only via "soft marketing," i.e., one-to-one, private and confidential discussions with third parties and shall not include any public or mass marketing of such capacity, or employ the use of brochures or similar materials intended for broad distribution. If Customer is informed (either by PanAmSat or by a potential sublessee) that the sublessee is in negotiation with PanAmSat for Comparable Capacity, Customer shall discontinue its marketing efforts directed at such sublessee); (iii) Customer: (A) shall remain responsible directly to PanAmSat for compliance with all obligations under this Agreement, including payment; (B) shall be responsible for and shall require its sublessees to comply with all of the conditions of use (operational and content) of this Agreement; and (C) if any sublessee will have an uplink to the Satellite that is not under Customer's direct operational control, shall require said sublessee(s) to enter into a third party access agreement(s) with PanAmSat, which makes said sublessee's obligations to comply with the conditions of use (operational and content) of this Agreement enforceable directly by PanAmSat against such third party (as well as against Customer); and (iv) Customer shall notify PanAmSat of all consideration promised and/or received by its sublessees. In the event that such consideration exceeds the amount of (A) Customer's Service Fee for the applicable Service Transponder and for the same period of use; and (B) such costs reasonably incurred by Customer for providing any related services and equipment to said sublessee, not provided by PanAmSat, that may be associated with the provision of such service, e.g., turnaround, compression, or other terrestrial services of facilities or in subleasing the Service Transponder or in remarketing such capacity (the "Excess Amount"), then, in addition to the monthly 6 Service Fees to be paid to PanAmSat by Customer, Customer shall pay [********************************************************] to PanAmSat. (c) Subject to any third party agreements which PanAmSat may have entered while the Service Transponder(s) are made available to it under Section 1.6(a) above consistent with the Notice of Availability that was given, Customer may withdraw an Availability or Sublease Notice at any time; provided that, until withdrawn, PanAmSat may, on notice to Customer, terminate this Agreement as to one or more of the Service Transponders that are then subject to an Availability or Sublease Notice, subject to any sublease agreements to which PanAmSat may have consented pursuant to Section 1.6(b) above. 2.2 (b) The Service Term for the remaining two (2) Service Transponders (the "Remaining Two"), and the change of designation of two of the three Initial Group Transponders, is acknowledged to have commenced on November 1, 1997. (For the avoidance of doubt, there is no change to clauses (a) or (c) of Section 2.2.) Appendix A, Transponder Designations. A revised Appendix A is attached to this Amendment. Appendix B, Service Specifications. In addition to the Service Specifications that are (and remain, where applicable) part of the PAS-3 Agreement, Service Specifications associated with the use of the Service Transponders when switched into the SSA or NSA beams are attached to this Amendment. [same as used for MultiCountry PAS-3 specs] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 7 Each of the parties has duly executed and delivered this Amendment as of the day and year first written above. PANAMSAT INTERNATIONAL SYSTEMS, INC. By: Name: Title: TELEVISA, S.A. de C.V. By: Name: Title: APPENDIX A (REVISED) SERVICE TRANSPONDERS PAS-3 INITIAL GROUP (March 1, 1997 through October 31, 1997) UPLINK DOWNLINK Transponder # MHz Band Beam Band Beam 7-EK 64 Ku Eur/No. Amer V Ku Europe H 11-EK 54 Ku Eur/No. Amer V Ku Europe V 15-EK 54 Ku Eur/No. Amer V Ku Europe V FIVE TRANSPONDERS (November 1, 1997, and thereafter) 11-EK 54 Ku Eur/No. Amer V Ku Europe V 13-K 54 Ku Eur/No. Amer V Ku Europe V* 6-K 54 Ku Eur/No. Amer H Ku No. Amer V** 10-K 54 Ku Eur/No. Amer H Ku No. Amer V** 14-K 54 Ku Eur/No. Amer H Ku No. Amer V** * To be switched to NSA Beam for Multi-Country and then back to Europe. ** To be switched to SSA Beam for Multi-Country and then back to No. Amer. EX-10 10 EXHIBIT 10.27.2 Exhibit 10.27.2 EXECUTION COPY SECOND AMENDED AND RESTATED TRANSPONDER PURCHASE AND SALE AGREEMENT This Agreement (the "Agreement") is entered into this 5th day of March, 1998, (the "Execution Date") by and between PanAmSat International Systems, Inc., a Delaware corporation formerly known as PanAmSat Corporation ("PanAmSat") and NetSat Servicos Ltda., a Brazilian limited liability quota company ("Buyer"). This Agreement covers the sale of Ku-band Transponders to Buyer (referred to generally as the "Buyer's Transponders"). Initially, Buyer purchased four (4) Transponders (the "PAS-3 Transponders") in the Brazil Beam of the Atlantic Ocean Region Satellite referred to by the parties as PAS-3, aka PAS-3R ("PAS-3") that was constructed by Hughes Space and Communications Company, formerly a division of Hughes Aircraft Company ("Hughes"), launched, and placed into commercial service on February 20, 1996. Buyer then purchased twelve (12) Transponders (the "PAS-6 Transponders") in the Brazil Beam of the Atlantic Ocean Region Satellite referred to by the parties as PAS-6 ("PAS-6") that was constructed by Space Systems/Loral, Inc. ("Loral"), and placed into commercial service on September 19, 1997. Under the circumstances specified below, Buyer will purchase twelve (12) Transponders (the "PAS-6B Transponders") and shall under the circumstances specified below be given access to the two [****] Transponders" (as defined below) in the Brazil Beam of that certain Atlantic Ocean Region Satellite referred to by the parties as PAS-6B ("PAS-6B"). PAS-6B is now under construction by Hughes. Under the circumstances specified below, Buyer may "trade-in" the PAS-3 Transponders and/or in the case of the purchase of PAS-6B Transponders, the PAS-6 Transponders. The Buyer's Transponders are more particularly identified in Appendix A and each satellite (generally referred to as a "Satellite") is described in Appendix B (one for each Satellite) of this Agreement. References in this Agreement to the "Primary Satellite" means PAS-6 before the "Delivery" (under and as defined in this Agreement) of PAS-6B and PAS-6B on and after the Delivery of PAS-6B. For the avoidance of doubt, if there is never a PAS-6B Delivery Date or if there is one, but it is negated under the provisions of Section 2.1A ("Condition Subsequent to PAS-6B Delivery") below, the Primary Satellite shall remain PAS-6. The Buyer's Transponders shall be supplied by PanAmSat in outerspace. The transponders on each Satellite and the beams in which these transponders are grouped are referred to as "Transponder(s)" and the "Beam(s)," respectively. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 1 This Agreement amends and restates that certain Amended and Restated Transponder Purchase and Sale Agreement, dated as of June 26, 1996, by and between PanAmSat and Buyer which implemented 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 acknowledge and agree that the combination of this Agreement and that certain "Transponder Service Agreement," by and between PanAmSat and Sky Multi-Country Partners, a Delaware Partnership, previously referenced as Multi-Country Partners GP ("Multi-Country Platform"), dated the same day as this Agreement (the "Multi-Country Agreement") supersedes the Letter Agreement as to PAS-3 and PAS-6 and the rights and obligations of the parties relative thereto, but that the rights and obligations of the parties to the Letter Agreement relative to PAS-5 are unaffected and remain binding. Further, the parties acknowledge and agree that the negotiation of this Agreement and the Multi-Country Agreement have responded to special circumstances regarding the [*****************] of PAS-6 that are not relevant to PAS-5 and that it is neither anticipated nor required that the rights and obligations of the parties to the Letter Agreement vis-a-vis PAS-5 will reflect this Agreement or the Multi-Country Agreement. References in this Agreement to Multi-Country Platform also refers to any permitted assignees of its rights under the Multi-Country Agreement. AGREEMENT In consideration of the foregoing and of the mutual promises set forth below, PanAmSat and Buyer mutually agree as follows: ARTICLE 1. SALE OF TRANSPONDERS 1.1 The Sale. PanAmSat agrees to provide and convey, and Buyer agrees to purchase, the Buyer's Transponders. Except as otherwise specifically permitted under this Agreement, PanAmSat shall not preempt or interrupt Buyer's use of the Buyer's Transponders. In no event shall these exceptions be construed so as to permit PanAmSat to preempt Buyer's use of the Buyer's Transponders so as to allow PanAmSat to use the Buyer's Transponders to provide Transponder capacity for itself or for another customer. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 2 1.1A [****] Transponders. Commencing on the earliest of (a) thirty (30) months after the PAS-6B Delivery Date, (b) March 1, 2001, and (c) such earlier date as PanAmSat may specify in its sole discretion (the "Availability Date") and for as long as this Agreement remains effective as to PAS-6B, PanAmSat shall make available to Buyer [******************************************************* ********************************************************************** ************************] the two (2) PAS-6B Brazil Beam Transponders denoted as [***] in Appendix A, provided that Buyer, in its good faith judgment, [*************************] Transponders for "Buyer's DTH Service" (as defined below) for use in Brazil. If at any time [**************************** ***********] for Buyer's DTH Service, Buyer shall return them (or, if one is needed, return one) to PanAmSat's use, [************************************* ***************************************]. The [*****] have been designed to perform in accordance with the Performance Specifications for the Buyer's Transponders on PAS-6B, but PanAmSat makes no representation or warranty regarding whether they will perform in this condition when their use is requested by Buyer. Title to the [***] Transponders shall not be conveyed to Buyer and Buyer shall not be entitled to any right of [***] or Substitute Capacity in connection with any failure of the [***] Transponders to perform, whether before or after their requested use, nor shall any right to [***] Transponders be required to be implemented with respect to any "Successor Satellite" or "Collocated Satellite," each as defined below. Where required under Section 5.3, PanAmSat shall employ available spare TWTAs (as defined below) to restore a failed [***] Transponder, but any such spare TWTA employed shall be preemptible by PanAmSat to protect any other Buyer's Transponder on PAS-6B that may fail to meet its Performance Specifications, even if such failure occurs after the initial use of the spare TWTA to restore a [***] Transponder to its Performance Specifications. For the avoidance of doubt, the frequency preemptibility provision shall not apply to TWTAs substituted in the course of the reassignment of TWTAs to restore a non-[***] Transponder to its applicable Performance or Service Specifications (reference is made to the second paragraph of Section 5.3) unless the TWTA employed for a [***] Transponder was already preemptible pursuant to the previous operation of this Section 1.1A. Except for provisions in conflict with the above, the [***] Transponders shall be governed by the provisions of this Agreement that govern Buyer's Transponders. This Section 1.1A shall not be effective until and unless there is a PAS-6B Delivery Date and shall cease to be effective upon the termination of this Agreement otherwise as to PAS-6B. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 1.2 PAS-3 Transponder Trade-In. Upon "Delivery" (as defined below) of the PAS-6B Transponders, Buyer shall "trade-in" and reconvey the PAS-3 Transponders to PanAmSat; provided that, if less than [***] PAS-6B Transponders are Delivered, for each one below [***] PAS-6B Transponders that are not Delivered, Buyer shall have the [***] (a "PAS-3 [***]") of retaining one PAS-3 Transponder, up to all [***], if only [***] or fewer PAS-6B Transponders are Delivered. The PAS-3 [***] shall be exercised by Buyer, if at all, no later than sixty (60) days after Delivery of such fewer number of PAS-6B Transponders; provided that, not later than thirty (30) days after the PAS-6B Delivery Date, Buyer shall notify PanAmSat which of Buyer's Transponders (if the PAS-3 [***] is for less than [***] Transponders) to which it intends the PAS-3 [***] to apply, if exercised, at which point the PAS-3 [***] as to the remaining PAS-3 Transponders shall expire. Buyer's exercise of the PAS-3 [***] shall be effective retroactive to the PAS-6B "Delivery Date." Subject, if applicable, to the availability of the PAS-3 [***] specified above, Buyer's trade in and reconveyance of the PAS-3 Transponders shall be effective [***] days after the PAS-6B Delivery Date (said [***] day period being referred to herein as the "Dual Illumination Period"), without any further action of Buyer or PanAmSat required; provided that said trade-in and reconveyance shall not be effective until [***] days after the PAS-6B Delivery Date for one PAS-3 Transponder if said Transponder is required for Buyer's home page (the "Home Page Transponder"). Buyer shall notify PanAmSat no later than [***] days after the PAS-6B Delivery Date if Buyer will require said additional time for the trade-in of Buyer's Home Page Transponder and which PAS-3 Transponder Buyer desires to use for this purpose. If the PAS-3 [***] is available (i.e., less than [***] Transponders on PAS-6B have been or will be Delivered), as to all PAS-3 Transponders for which the PAS-3 [***] is not exercised, Buyer's trade-in of the PAS-3 Transponders will be effective on the earlier of sixty (60) days after the PAS-6B Delivery Date or the date that Buyer notifies PanAmSat of Buyer's election not to exercise the PAS-3 [***] , in whole or in applicable part, but in no event earlier than [***] days after the PAS-6B Delivery Date. At PanAmSat's request, Buyer shall execute such document of reconveyance as PanAmSat may reasonably request to confirm that such reconveyance has occurred. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 4 If this Agreement terminates as to PAS-6B without the occurrence of a PAS-6B Delivery Date, Buyer shall have the right on notice to PanAmSat to "trade-in" and reconvey one or more of the PAS-3 Transponders within thirty (30) days of such termination. In such event the "trade-in" and reconveyance shall be effective upon timely notice from Buyer to PanAmSat of Buyer's exercise of such right. Upon the effective date of any trade in and reconveyance of PAS-3 Transponders as permitted above, this Agreement shall terminate as to PAS-3 Transponders that are reconveyed to PanAmSat and the provisions of Section 7.6 shall apply. The foregoing notwithstanding, Buyer's obligation to make Installment payments for the PAS-3 Transponders reconveyed to PanAmSat under any part of this Section shall cease (as determined on a Transponder by Transponder Basis): (a) if there is a PAS-6B Delivery Date, on the later of: (i) the PAS-6B Delivery Date, or (ii) as of the date that is [***] days prior to the date that Buyer notifies PanAmSat of Buyer's election not to exercise the PAS-3 [***] for the applicable Transponders; or (b) if this Agreement is terminated as to PAS-6B without a PAS-6B Delivery Date, upon the termination of this Agreement as to PAS-6B. PanAmSat shall be entitled to retain the Installments already paid and shall be entitled to any Installments due prior to the effective date of the trade in of PAS-3 Transponders, as determined above, but not already paid. For the avoidance of doubt, payments made for the PAS-3 Transponders shall not apply to the PAS-6 or the PAS-6B "Purchase Price" (as defined below), which shall be payable in full. 1.2A PAS-6 Transponder Trade-In. Upon "Delivery" (as defined below) of the PAS-6B Transponders, Buyer shall "trade-in" and reconvey the PAS-6 Transponders to PanAmSat. Buyer's trade in and reconveyance of the PAS-6 Transponders shall be effective [***] days after the PAS-6B Delivery Date, without any further action of Buyer or PanAmSat required. At PanAmSat's request, Buyer shall execute such document of reconveyance as PanAmSat may reasonably request to confirm that such reconveyance has occurred. Upon the effective date of such trade in and reconveyance, this Agreement shall terminate as to all of PAS-6 Transponders and the provisions of Section 7.6 shall apply. The foregoing notwithstanding, Buyer's obligation to make Installment payments for the PAS-6 Transponders reconveyed to PanAmSat under this Section shall cease on the PAS-6B Delivery Date. PanAmSat shall be entitled to retain the Installments already paid and shall be entitled to any Installments due prior to the effective date of the trade in of [***] Filed separately with the Commission pursuant to a request for confidential treatment. 5 PAS-6 Transponders, as determined by the previous sentence, but not already paid. For the avoidance of doubt, payments made for the PAS-6 Transponders shall not apply to the PAS-6B "Purchase Price" (as defined below), which shall be payable in full. Further, this Section 1.2A shall not apply if there is never a PAS-6B Delivery. 1.2B Interference Between PAS-6 and PAS-6B. Buyer acknowledges and agrees that its Transponders on PAS-6B cannot be used at the same time as the Transponders of the same frequency on PAS-6 while the Satellites are located in the same orbital slot and that, during the Dual Illumination Period, Buyer shall not be entitled to any remedy for any interference that may be suffered to the Buyer's Transponders due to the co-frequency operation of Transponders on PAS-6 and PAS-6B by Buyer or Multi-Country Platform. 1.3 Beam Switching, PAS-3. Certain of the Buyer's Transponders on PAS-3 are designed to be capable of operation from different uplink Beams. Their current configuration is shown in Appendix A. Upon Buyer's written request, subject to PanAmSat's consent not to be unreasonably withheld, including, without limitation, for reasons of actual or potential interference to existing satellites, satellites that are under construction and/or notified or subject to other application to the FCC or the ITU, or use by other customers, PanAmSat will, if required, but not to be on a frequent basis, make additional changes to the uplink Beam of these switchable Transponders; provided as follows: (a) if the change cannot be accomplished using reasonable engineering standards, this Agreement shall continue to operate with the Buyer's Transponders in their then-existing configuration, as if the request for a change had not been made; (b) if Buyer requested the change in order to replace Buyer's Transponder to be uplinked from a location which was lost because of a failure of another Buyer's Transponder to meet the Performance Specifications, in circumstances in which such other Buyer's Transponder could not be restored with "Spare Equipment" or "Substitute Capacity," as defined in Section 5.3, PanAmSat shall bear the risk of loss if the Buyer's Transponder(s) is damaged or made unusable as a result of attempting to make the change (i.e., if the Performance Specifications for such Transponder can no longer be met, the provisions of this Agreement that apply to a failure of a Buyer's Transponder on a Confirmed Basis shall apply); and (c) except as provided in the preceding clause (b), Buyer shall accept the risk of loss if the Buyer's Transponder(s) is damaged or made unusable as a result of attempting to make the switch (i.e., the Buyer's Transponder shall not be deemed to have failed on a Confirmed Basis). 6 1.3A Beam Switching on PAS-6B. Certain of the Buyer's Transponders on PAS-6B may be capable of operation in the downlink of the Latin Beam of PAS-6B. Upon Buyer's written request, subject to PanAmSat's consent not to be unreasonably withheld, including, without limitation, for reasons of actual or potential interference to existing satellites, satellites that are under construction and/or notified or subject to other application to the FCC or the ITU, or use by other customers, PanAmSat will, if required, but not to be on a frequent basis, change the downlink Beam of such switchable Transponders (if any) to the Latin Beam; provided as follows: (a) if the change cannot be accomplished using reasonable engineering standards, this Agreement shall continue to operate with the Buyer's Transponders in their then-existing configuration, as if the request for a change had not been made; (b) Buyer shall accept the risk of loss if the Buyer's Transponder(s) is damaged or made unusable as a result of attempting to make the switch (i.e., the Buyer's Transponder shall not be deemed to have failed on a Confirmed Basis); (c) the Transponder(s) being switched shall continue to count toward Buyer's Minimum Complement; (d) Buyer shall not be permitted to switch the [***] Transponders or to use the [***] Transponders while any of Buyer's other Transponders are switched out of the Brazil Beam; and (e) while payment for such Transponder(s) will continue to be made under the pricing provisions set forth in this Agreement, [******] must (i) consent to such switch and (ii) unless [*****] has exercised its [******] under Section 18.2 of the[***], must agree with PanAmSat in writing to[****************************************************************** **************] for determining the [******] to PanAmSat and otherwise adjust its [***] to treat such switched Transponders the same way that "Additional Transponders" (as defined in the [***] provided from another satellite would be treated; provided that PanAmSat may in its sole discretion expressly waive in writing the requirements of this clause (e)(ii), in which event the [***] of [*****] to PanAmSat under the [***] shall then be unaffected by the switch. 1.4 Covenants on Use. Buyer acknowledges and agrees that the sale that is the subject of this Agreement is being made in consideration, among other things, of Buyer's agreement and promise to use the Buyer's Transponders for particular purposes. In this regard, Buyer agrees as follows: [***] Filed separately with the Commission pursuant to a request for confidential treatment. 7 (a) DTH Service. Except as otherwise provided herein, Buyer's Transponders shall be used to meet the satellite transmission requirements of Buyer's direct to home service, which for purposes of this Agreement, except for the specific purposes of Section 1.7, means video and audio programming that is provided on a pay or subscription basis, with associated audio and data signals (e.g., authorization codes) together with 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 via "Ku-band" (as defined below) satellite transponders in Brazil ("DTH Service"). Other uses of the Buyer's Transponders shall be permitted to the extent provided under this Section 1.4 and Sections 1.6 below. References in this Agreement to Buyer's "transmissions" and, except where specifically limited to "video," references to Buyer's "programming" shall be deemed to include all permitted video and non-video applications. As used in this Agreement, "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) Buyer's DTH Service. As used in this Agreement, the reference to "Buyer's DTH Service" shall be deemed to include any DTH Service that is owned, operated or managed by Buyer 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 Buyer. 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 Buyer: News, Tele-Communications International, Inc. ("TINTA"), Globo, and/or any of the "Approved Companies" that are identified in Appendix I. News, Globo, and TINTA are also referred to herein as the "Founding Partners." At Buyer'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 Buyer is retained by other Approved Participating Companies, (ii) to exclude separate programming rights under Section 1.4(c) 8 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 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 Buyer and participation in Buyer's DTH Service, Buyer 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 Buyer's DTH Service may carry programming provided to it by third parties. Buyer 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 Buyer's DTH Service also to be received (the same feed), on an ancillary basis, by cable head ends, SMATV, MMDS, and other facilities that may be developed for the distribution of video programming ("Non-DTH Outlets"). As used in this Agreement, "Affiliate" means, with respect to any entity, 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 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. Buyer, each Founding Partner (as long as it directly or indirectly, owns or has an investment or economic interest in Buyer or in Buyer's DTH Service), each Approved Participating Company that has a minimum 10% voting equity in the Buyer, and each entity that is an Affiliate of any of the foregoing entities is referred to herein as a "Buyer Company." To the extent that the capacity provided by the Buyer's Transponders exceeds the requirements of the Buyer 9 Companies for the satellite transmission of DTH Service in the Ku-band (as they reasonably determine) and the Buyer Companies are not using other Ku-band satellite capacity in lieu of the Buyer's Transponders, to meet such requirements for Brazil, the Buyer Companies may use the Buyer's Transponders for their own needs with respect to 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; provided that the rights set forth in this Section 1.4(c) shall not be available to Buyer during any period in which Buyer is being granted access (at Buyer's request) to one or both of the [***] Transponders in accordance with Section 1.1A above]. (d) Use by Others. In any circumstances in which Buyer is permitted herein to allow the Buyer's Transponders to be used by other Buyer Companies, or in circumstances in which Buyer's DTH Service may carry programming services provided to it by others, Buyer shall remain ultimately responsible to PanAmSat for all such use. In such circumstances, Buyer's responsibilities to PanAmSat with respect to Buyer's use of Buyer's Transponders, Buyer's transmissions to the Satellite(s), Buyer's programming and the responsibilities of Buyer to PanAmSat for other activities hereunder shall be read to include the use, transmissions, programming, and activities of any such other entity. (e) International PSN Restriction. In no event may the Buyer's 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. Buyer acknowledges and agrees that it is the parties' intent, in allowing the carriage of programming services provided by others, to further Buyer's ability to develop the DTH market, but not to allow Buyer to resell or otherwise make the Buyer's Transponder(s) available to others at a profit solely on the capacity itself, and that Buyer shall not, through the permission granted or through any other agreement or arrangement, enter into any agreement to, or use the Buyer Transponder(s) in any way that would, materially conflict with this intent. 1.5 Transmission Plan for Transponders. Buyer's transmissions to the Satellite(s) (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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 10 submitted by Buyer 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. Buyer 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, Buyer 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 Buyer, in which event Buyer 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 Buyer's Capacity. At Buyer's request, PanAmSat shall market up to four of Buyer's Transponders for use by third parties on an interim basis until Buyer requires them for the DTH Service; provided that no such marketing shall occur during the period between the [***********************************] and the earlier of (a) the [***] or (b) the termination of this Agreement as to [***] without the occurrence of a [*******] (the "Interim Period"). In such circumstances that marketing is requested, PanAmSat shall use all reasonable efforts to market services from the Buyer's Transponders (up to four) made available for this purpose (which Buyer would thereafter cease to employ) for the interim period to other potential customers for video, data, or other uses, as market demand and technical considerations may warrant, as reasonably determined by PanAmSat in consultation with Buyer, 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 Buyer's consent rights set forth in clause (b) of this Section. In such event: [***] Filed separately with the Commission pursuant to a request for confidential treatment. 11 (a) PanAmSat shall actively market services from the Buyer's Transponders in good faith provided that PanAmSat shall not be obligated to use theBuyer's Transponders ahead of any other capacity that PanAmSat may also have available for comparable service. Following the Interim Period, unless otherwise agreed, marketing shall be for full-time, fixed term uses. With the exception of the marketing of the Buyer's Transponders for occasional use prior to the Interim Period, all contracts regarding possible use by third parties of Buyer's Transponders, as permitted under this Section 1.6, shall be promptly forwarded by PanAmSat to Buyer for specific written approval, rejection, or proposed modification by Buyer, it being understood that neither PanAmSat nor a third party customer shall be required to accept Buyer's proposed modifications, but also may not go forward with an unmodified agreement for Buyer's Transponders under this Section 1.6 that Buyer has not approved. Buyer shall also have the right to approve or reject any particular customers for service from Buyer's Transponders that are made available under this Section. In addition, subject to the considerations stated above, if Buyer identifies to PanAmSat a potential customer who desires to purchase service from PanAmSat that employs the Buyer's 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 (b) PanAmSat shall credit against Buyer's next monthly "Installment" (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 Buyer's 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 Installment paid by Buyer for the applicable period for the Buyer's Transponders made available by Buyer 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 12 Additional Facilities Costs, if any, and Transaction Costs specified above, if the [************************] by PanAmSat for [***] from the Buyer's Transponders [***] the [***] to be [***] to PanAmSat by Buyer for the [***] (the "[***]") in [***] to crediting the next month's Installment payment, PanAmSat shall[***], as an [********] of such [***] and shall [***] Buyer [***] of such[***]. 1.7 [***] (a) General Obligations. (i) PanAmSat. Subject to the exceptions stated in this Section 1.7, PanAmSat agrees that, during the "Term" of this Agreement (as defined 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 (x) which is owned, operated or managed by PanAmSat or any PanAmSat Company, (y) which is located in the [********] (defined herein to be the [***] at which the Primary Satellite is [**********] and (z) which has Ku-band coverage over [***] (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 Buyer as a [*********] entitled to [***] such[***]; or (B) [***] its [***] for any satellite located in the [*********] unless the assignee agrees to be bound by the provisions of the previous clause (A). The foregoing notwithstanding, neither PanAmSat nor any PanAmSat Company shall be required to place [***] on its Ku-band Transponders that [***] the [***] of transmissions [*****] or [*****], 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 [***] (such as the Ku-band [***] Filed separately with the Commission pursuant to a request for confidential treatment. 13 Transponders on PAS-6 that are being provided to [**************************** ****************] but that may have [***](in terms of [***] for DTH Service) over a [***] of[***]. For the avoidance of doubt, none of the restrictions on PanAmSat or any PanAmSat Company that are stated in this Section 1.7 shall apply to any satellite that is not [***************************]. (ii) Buyer. Subject to the exceptions stated in this Section 1.7, Buyer agrees that, during the Term of this Agreement, neither it nor any Buyer Company will: (A) own, invest in, or hold an economic interest in a DTH Service [************] that [****************************] other than that provided by [***] pursuant to [***]; or (B) use any [*******************] 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 Buyer or a Buyer Company from making an investment in [***] or its DTH Services; (B) PanAmSat or a PanAmSat Company from making an investment in Buyer, a Buyer Company, or in Buyer's DTH Service; (C) Buyer or any Buyer Company from making an investment in PanAmSat or a PanAmSat Company. (b) Buyer Exceptions. Subject to Section 1.7(g) below, this Section 1.7 shall cease to apply to Buyer or any Buyer Company in any [***] of the following circumstances: (i) Buyer is required by law or other compelling Brazilian government force, as Buyer reasonably determines to be the case (the basis for which Buyer shall promptly disclose to PanAmSat in reasonable detail), to [***] DTH Services from its [***] or[****************************]; or (ii) (A) Buyer is using [***] of the [***] provided hereunder for the [****] DTH Service, (B) Buyer requests in writing, PanAmSat to [***** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 14 ********] Ku-band capacity for its DTH Service, which request shall make express reference to Buyer's intent to invoke its rights under this clause, and (C) PanAmSat is [***] to make such [***] available, at agreed upon [***] or, if applicable, [***] as [***] under Section 16.1(a)(ii) that Buyer has accepted, within [***] of such written request and agreement on, or acceptance of, [***] and (D) within [***] following the date that PanAmSat notifies Buyer that PanAmSat is [***] to meet such [***] request within said period, Buyer acquires or enters into a binding agreement to acquire such [***]. PanAmSat shall keep Buyer reasonably apprised of its efforts in response to a written request under this clause andshall notify Buyer at any such time that PanAmSat reasonably determines that it will not meet such request within the [***] period. (iii) At Buyer's[***], if this Agreement is terminated as to PAS-6B without the occurrence of a PAS-6B Delivery Date or upon the occurrence of the PAS-6B Delivery Date. (c) Intentionally Deleted. (d) [**********]. At Buyer's [***], the provisions of this Section 1.7 shall [***] to a [***] on and after 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 Buyer 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 [***] within [***] (other than the Buyer's DTH Service); and (ii) Buyer 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 [******]. (e) Intentionally Deleted. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 15 (f) Notices. Each party shall promptly notify the other of an event that gives rise to a right to [***] the [***] of this Section 1.7 in relevant part. Within [***] (or, in the case of clause 1.7(b)(ii), [***]) of receiving such notice or notice of an event that would permit a party to [***] the [***] of this Section 1.7 in relevant part, 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). (g) Survival. The [***] provisions of this Section 1.7 shall not relieve Buyer, the Buyer Companies, and, even if no longer a Buyer Company, the Founding Partners from the notice obligations stated in Section 1.7(d)(ii). (h) [***] of DTH Service. For purposes of this Section 1.7, [***] do [***] DTH Service. In addition, except for operations from the Primary Satellite Orbital Slot, for purposes of this Section 1.7, the definition of "DTH Service" is [***] to [***] with associated [***] and [***] that is intended for [***] via satellite by [********] in the[***]. (i) [*********]. The obligations specified in this Section 1.7 shall [***] at such time that this Agreement is [***] as to [******] and [***], even if this Agreement [***] in [***] for PAS-3 Transponders. (j) Successors in Interests. For the avoidance of doubt and not for limitation, the provisions of this Section 1.7 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. (k) Individual Conduct. If any individual(s) who Controls an entity that is subject to this Section 1.7 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 1.7(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 1.7 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 16 Partner, shall have the same additional consequences under Sections 1.7(d) and Article 16 of this Agreement as if that Founding Partner were a Founding Partner in Competition. ARTICLE 2. DELIVERY, TITLE. 2.1 Term, Delivery. The term of this Agreement (the "Term") is acknowledged to have commenced as of April 15, 1996 and, subject to 16.1(f), shall remain in effect until this Agreement is terminated in accordance with its terms, as to all of the PAS-3, PAS-6, and PAS-6B Transponders. "Delivery" of Buyer's PAS-3 Transponders is acknowledged to have occurred on April 15, 1996 and "Delivery" of the Buyer's PAS-6 Transponder(s) is acknowledged to have occurred on September 19, 1997. In this regard, PanAmSat hereby certifies to Buyer that, as of their respective Delivery Dates, PAS-3 and PAS-6each were placed in their assigned orbital position with all four (4) PAS-3 Brazil Beam Transponders and all twelve (12) Brazil Beam PAS-6 Transponders meeting their respective "Performance Specifications" set forth in Appendix C. Delivery of Buyer's PAS-6B Transponders shall occur on the date that PAS-6B has been placed in its assigned orbital position, with at least the "Minimum Complement" of Buyer's Transponders meeting the Performance Specifications set forth in Appendix C, and PanAmSat so certifies to Buyer and makes such Transponders available to Buyer for its use, unless Buyer agrees to accept Delivery from fewer of Buyer's Transponders than the Minimum Complement, which fewer number would then be deemed to be the Minimum Complement for PAS-6B hereunder. The foregoing notwithstanding, if PanAmSat is unable initially to Deliver (i.e., at the PAS-6B "Delivery Date") the Minimum Complement of Buyer's Transponders on PAS-6B, PanAmSat will not be required to Deliver to Buyer a fewer number, if less than the number of PAS-6 Brazil Beam Transponders that then currently are capable of meeting their Performance Specifications. PanAmSat shall give the certification to Buyer required for Delivery of PAS-6B, if it would be true and correct, when PAS-6B is ready to be placed into commercial service. For each Satellite, the date of Delivery is referred to in this Agreement as the "Delivery Date." Subject to the earlier part of this paragraph, the "Minimum Complement" of Buyer's Transponders on PAS-6B is [***]; provided that any [***] Transponders that meet their Performance Specifications and that are used by Buyer or available to it on 120 days' notice under Section 1.1A shall be counted toward [***] Filed separately with the Commission pursuant to a request for confidential treatment. 17 the PAS-6B Minimum Complement. PAS-6B is anticipated to be launched in October, 1998, and the Delivery Date for PAS-6B is currently anticipated to occur no later than November 30, 1998, the "Latest Anticipated Delivery Date" for PAS-6B. Subject to Section 2.4 below, any Buyer's Transponder on PAS-6B that does not meet the PAS-6B Performance Specifications at the time that one or more other Buyer's Transponders on PAS-6B are "Delivered" shall at that time cease to be a Buyer's Transponder or subject to this Agreement. For the avoidance of doubt, while PAS-3 is anticipated to have a lifetime of between fourteen (14) and fifteen (15) years, PAS-6 is anticipated to have a lifetime of between twenty (20) and twenty-one (21) years, and PAS-6B is anticipated to have a lifetime of eighteen and one-half (18-1/2) to nineteen and one-half (19-1/2) years, the Performance Specifications shall be deemed to be met regardless of anticipated life after launch and, subject to Section 7.6 in the event of early termination, the full Purchase Price shall be due. PanAmSat shall use commercially reasonableefforts to cause each of Buyer's Transponders on PAS-6B to be Delivered on or before the Latest Anticipated Delivery Date for PAS-6B. Buyer acknowledges and agrees that the PAS-6 and PAS-6B Satellites have been designed by their manufacturers for planned lives of fifteen (15) years, but the launch of PAS-6 and the anticipated launch of PAS-6B are now predicted to allow enough fuel for the Satellites to be maintained for longer periods. Buyer further acknowledges and agrees that such extended life beyond the approximate fifteen (15) years that would otherwise be anticipated is due to unusual circumstances associated with the launch of PAS-6 (and the anticipated launch of PAS-6B) and is not anticipated or required to be repeated in the case of [***************************************************], from which capacity may be taken or ordered pursuant to this Agreement. 2.1A Condition Subsequent to PAS-6B Delivery. If the Minimum Complement of PAS-6B Transponders cannot be provided as of the date that is forty-five (45) days after the PAS-6B Delivery Date, the PAS-6B Delivery Date shall be deemed not to have occurred and the parties shall be returned to the status quo ante, in all respects as if the PAS-6B Delivery Date had not occurred; provided that in the circumstances set forth in Section 2.1 where Buyer would have had the [***] to waive the Minimum Complement and accept a fewer number of Transponders on PAS-6B at Delivery (which would then be the Minimum Complement) and if PanAmSat would have been required to Deliver such fewer number, Buyer shall have the same [***] under this Section 2.1A to be exercised, if at all no later than ten (10) days after the earlier of: (a) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 18 the date that it is determined that the Minimum Complement cannot be met, or (b) forty-five (45) days after the PAS-6B Delivery Date. 2.2 Assumption of Risk. Subject to Section 7.6 below, any loss of or damage to the Buyer's Transponders on or after the Delivery Date will be at the risk of Buyer. Subject to Section 2.5 below, any risk or loss of or damage to the Buyer's Transponder(s) prior to Delivery will be at the risk of PanAmSat. 2.3 Ownership and Title. Upon payment by Buyer to PanAmSat of the full Purchase Price, PanAmSat shall transfer title to the Buyer's Transponders to Buyer at a location outside of the U.S. by delivery of an executed bill of sale for the Buyer's Transponders free and clear of all liens, claims, encumbrances and rights of others, except as created by action or failure to act of Buyer, in the form of Appendix F hereto. 2.4 Degraded Transponders. Either before or after Delivery, if a Buyer's Transponder, while operational, does not meet the Performance Specifications, Buyer shall have the right, within ten (10) days of being notified of this condition, provisionally to waive the Performance Specifications to the extent that they are not met. If Buyer gives such a provisional waiver, Buyer 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 Performance Specifications to reflect the affected Transponder(s)' current operating level, or not. The applicable termination provisions of Section 7.2 or 7.3 shall also be stayed during any period in which Buyer is considering electing a permanent waiver. During this period, Buyer and PanAmSat shall negotiate in good faith, to the extent that the degradation reflects a material loss in the capacity provided, to reach agreement as an appropriate price reduction for the affected capacity (which would, if agreed, be applied retroactively to the time of the failure to meet the applicable Performance Specifications), provided that nothing herein shall require that a price reduction be given or that an agreement be reached. If Buyer gives a provisional waiver, it shall take and pay for (without Warranty Credit) the affected degraded capacity, as if Delivered or provided in accordance with the Performance Specifications until the conclusion of the sixty day period specified above. On or before the end of this sixty-day period, either Buyer 19 shall grant a permanent waiver of the Performance Specifications (subject to any change in price as to which both Buyer and PanAmSat shall have agreed) or the termination provisions of this Agreement, as to the capacity that does not meet the Performance 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 Performance Specifications (so that, for example, Delivery shall be deemed to have occurred on the same day as the Delivery of the other Buyer's Transponders on the Satellite that meet their Performance Specifications). In such event the Performance Specifications for the affected Buyer's Transponder(s) shall be reduced to reflect the current operating level of the affected Buyer's Transponder(s); provided that PanAmSat continues, if there are further steps may practically be taken, to use reasonable efforts to restore the affected Transponder to meet the Performance Specifications; provided further that if any price reduction was agreed upon, the restoration of a Transponder to its Performance Specifications shall also result in the restoration of the original price to be paid for the applicable capacity from that point forward. For the avoidance of doubt, a waiver given under this Section 2.4 shall not, unless otherwise agreed by Buyer, be deemed to apply to any further reduction in performance from the operating level of the affected Buyer's Transponders at the time that the waiver was given. 2.5 Pre-Delivery Testing. PanAmSat shall have Hughes conduct the pre-Delivery testing of PAS-6B in a manner that does not interfere with Buyer's use of Buyer's Transponders on PAS-6. PanAmSat shall use all reasonable efforts to coordinate with Hughes (who conducts the pre-Delivery in-orbit check out of PAS-6B) to allow Buyer, in consultation with PanAmSat, if practical under the circumstances, to test Buyer's transmit and receive equipment to be used with PAS-6B on a noncommercial basis during the post-launch, pre-Delivery 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 Buyer in carrying out such testing. Buyer 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-6B. Buyer shall be responsible for any damage caused by its failure to abide by any of these conditions. 20 ARTICLE 3. PURCHASE PRICE AND PAYMENT SCHEDULE. 3.1 Purchase Price. As set forth in this Agreement, Buyer shall pay to PanAmSat, on the terms and conditions specified herein, [******************* ********************************************************************* *****************************************************] for each PAS-3 Transponder that is Delivered; [************************************** *********************************************************] for each PAS-6 Transponder that is Delivered; and subject to the [***] provisions of Section 3.2A [************************************************************************ *******************************************************************] for each PAS-6B Transponder that is Delivered (the "Purchase Price"). As set forth below, payment shall be made in Installments with interest accruing on the unpaid portion of the Purchase Price at 6.079% per annum compounded monthly (effective rate of 6.252% per annum), commencing with the Delivery Date of each Satellite. Payment shall be made as follows: (a) Deposit. PanAmSat acknowledges its receipt of a total "Deposit" of [**************************************************** ******************] (the "Deposit"). This Deposit has been fully applied to offset the first two (2) Installment payments [************************** ********], with the remaining portion of the Deposit applied to offset the initial Installment payment(s) for PAS-6 . (b) Installments. The Purchase Price for each of Buyer's Transponders shall, subject to Section 3.1(c) below, be payable in one hundred eighty (180) monthly installments for PAS-3, running separately, two hundred and forty four (244) monthly installments for PAS-6, and, running separately, two hundred and thirty four (234) monthly installments for PAS-6B of principal and interest (each an "Installment"), of [************************************* ****************************************************************************** *****] per Buyer's Transponder per month. The first Installment payment for each Satellite (subject to the previous application of the Deposit), shall be due on the Delivery Date for the applicable Satellite. Buyer shall make each and all Installment payments (except as to Installments, or applicable portion thereof, for which the Deposits have been applied), in advance, no later than the same day (or, if not a business day, the next business day), of each month that follows until the Purchase Price for the Buyer's Transponders on the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 21 applicable Satellite is fully paid. Amortization schedules (the "Amortization Schedules") showing the principal and interest paid with each Installment are set forth in Appendix H to this Agreement. For the avoidance of doubt, the predicted or actual shortened life of a Satellite below that which is anticipated shall not affect PanAmSat's right to the payment of each Installment, in full, with the interest component specified based upon the full Purchase Price, up to the time that the Satellite is actually taken out of commercial service. Buyer may prepay the Installments at any time. The prepayment price shall be the total amount of the Installments (principal and interest, as if not prepaid), [***] for [***] at a rate of [***] per annum from the date prepaid to the date otherwise due. If the Installments are prepaid, in circumstances in the future under which Buyer would have been entitled to a "Warranty Credit" under Section 5.2 orwould have been relieved of its obligations to make future Installment payments under Section 7.6, Buyer shall be entitled to a refund that shall be equivalent to the Warranty Credit or relief from future payments that Buyer would have otherwise received, except that, for this purpose, the monthly per Transponder [***] payments against which these calculations are made shall be calculated as follows on a Satellite by Satellite basis: each monthly Installment payment per Transponder shall be deemed to be the [***] by Buyer with respect to the Satellite, [***] by the [***] of the [***] of Buyer's Transponders at the time of prepayment [***] by the [***] for which Installment payments were still due at the time of prepayment. (c) [******************]. During the Interim Period (as defined in Section 1.6 above), PanAmSat shall [*********] to [***************] for such Period (and [******] the [************] by the [******] that would have been covered in such Installments) on PAS-6 as if such [***************] for Buyer's Transponders that Buyer does not use during this Period, subject to the following qualifications: (i) Subject to the further qualifications set forth below, Buyer shall [*********] for a [***] of [*********] collectively on PAS-3 and PAS-6 (the [******] whether or not[***] as long as at least [***] Filed separately with the Commission pursuant to a request for confidential treatment. 22 [***] of Buyer's Transponders collectively on PAS-3 and PAS-6 meet their respective Performance Specifications. (ii) Buyer is currently using the following [*************************************************************************** ********]. Buyer shall notify PanAmSat prior to employing any additional [************] which notice shall specify what additional [***] will be employed, it being understood that prior to such notice PanAmSat may elect to keep such[***************************]. At any time that Buyer exceeds its [************] the [***] of [************] shall, subject to the qualifications set forth below, thereafter become the[******] subject to further increase if additional [******] are [***] by Buyer. (iii) Buyer may, on notice to PanAmSat, [***] its [******] in any of the following circumstances set forth below, provided that Buyer and [************] as much of the [******] to them by [***************] as may be [***] without reaching any of the thresholds specified in these provisions: (A) the number of [************] on PAS-6, with [*********************] is [***************] at the time of all of the [*********] that are then employed by Buyer and [*********] (B) there is not the equivalent of at least [*********] each for the [*********************] or (C) the number of [******] reasonably projected to meet their applicable [******************************] for at least [*********] following the date on which PAS-6B is scheduled to commence commercial operation [******] the [***************************** ****************] of Buyer [******************]. Buyer shall not be permitted to [*********] of [***] that it uses in circumstances where (i) it would, when [***] with [*******************] of [***] exceed the then [******************] for [***] Filed separately with the Commission pursuant to a request for confidential treatment. 23 [******]or (ii) if it would allow [************] to [***] its [************] under [******] of its Agreement, subject, however, to [************] right to waive such [***] in its [************]. (iv) PanAmSat shall report to Buyer monthly on the number of [*********] available, the number of [*****************************] into the [******************] and the number of [*********************] projected to meet their applicable [************] for at least [************] following the date on which PAS-6B is scheduled to go into commercial operation, and shall notify Buyer within forty-eight (48) hours of any reported[******]. 3.2 TT&C Fee. In the event that (i) PAS-3 remains in Service [******************] (ii) PAS-6B [******************************************] or (iii) if Buyer exercises its termination right under Section 7.9 of this Agreement, PAS-6 remains in service [****************] or otherwise PAS-6 remains in service [************************************** ******] and all Installment payments with respect to Buyer's Transponders on the applicable Satellite up to said point have been made, if Buyer decides to continue to use the Buyer's Transponders on the Satellite, it may do so for the [*********] of the applicable Satellite [************************************************** ******************************************************************************* ******************************************************************************** **************] by paying PanAmSat a monthly TT&C fee of [********************** ************] per Transponder (the "TT&C Maintenance Fee"). The TT&C Maintenance Fee shall be due and payable monthly on the same day of the month that the Installments were previously due. If Buyer elects to continue to use a Buyer's Transponder on the affected Satellite during this period, it must pay the TT&C Maintenance Fee for all of Buyer's Transponders on the affected Satellite that continue to meet the Performance Specifications and/or that Buyer continues to use on a degraded basis. If Buyer does not pay the TT&C Maintenance Fee, Buyer shall not be permitted to continue to use (or allow others to use) the Buyer's Transponders on the affected Satellite, this Agreement shall be terminated as to the affected Satellite, and, as compensation for PanAmSat's continuing operation of the Satellite, PanAmSat shall be permitted to use and/or permit others to use the Buyer's Transponders on the affected Satellite for any purpose whatsoever. For the avoidance of doubt, for (i) the [***********] PAS-3, (ii) the [***************************] of life of [***] Filed separately with the Commission pursuant to a request for confidential treatment. 24 PAS-6B, and, (iii) if Buyer exercises its early termination right under Section 7.9, the [*****************] on PAS-6; for the [***************] of the life of PAS-6 if Buyer does not exercise its early termination right under Section 7.9, the TT&C fee is calculated into the Purchase Price and TT&C will be provided by PanAmSat (and/or its contractors) during these periods at [*********] to Buyer. 3.3 Manner Of Payment. All payments by Buyer 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 Buyer, 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 Buyer 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 PanAmSat. Buyer acknowledges that such delinquency charge is reasonable under all the circumstances existing as of this date. 3.5 Taxes. (a) Buyer's Responsibility. Buyer shall be responsible for, and shall indemnify PanAmSat against, all Taxes (x) imposed by [***] (which for purposes of this Section 3.5 shall be deemed to include any [***************] (y) imposed by [******] as a result of the [***] to Buyer's Transponder or [******] from Buyer's Transponders of encrypted signals (or, in the case of signals which are not encrypted, any such [***] to or from such [***] or (z) imposed by [******] from which Buyer makes payments to PanAmSat hereunder, in each case including any political subdivision or taxing authority thereof or therein, in each case with respect to the [*********] or [***] of Buyer's Transponders, and with respect to [***] under this Agreement, [***] to the extent of: (i) any Taxes [***] on PanAmSat by reason of its having an [************] or other [******] of business in [***] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 25 other than any [*********] or [******] in [***] PanAmSat is required by [***] law to maintain to fulfill its obligations under this Agreement and/or to provide any other satellite capacity, satellite transmission or ancillary service thereto to any customer, which ancillary service does not involve PanAmSat's having [***************] provided that PanAmSat shall use commercially reasonable efforts to accomplish such tasks in a manner that limits or does not expose itself to such Taxes for which Buyer could be responsible; or (ii) any Taxes to the extent imposed on [***] to PanAmSat solely by reason of the [***] of PanAmSat to provide, at the written request of the Buyer, any documentation or certification reasonably required to be made to [******] from, or [***] of, such Taxes; or (iii) in the case of an assignment of PanAmSat's rights under Section 10.4 to any entity organized outside, or receiving payments outside of, the [***] any Additional Amounts exceeding the Additional [***] (as defined below) that would have been imposed had the payment been made to PanAmSat. (such non-excluded Taxes, "Buyer Indemnified Taxes"). If any Buyer Indemnified Taxes are imposed through [***] at the [***] on payments to be made under this Agreement, Buyer shall [***] to PanAmSat such additional amounts ("Additional Amounts") as may be necessary such that everypayment to PanAmSat hereunder, after [***] or [***] for or on account of such Buyer Indemnified Taxes, will not be [***] than the amount provided for under this Agreement. Buyer shall promptly forward to PanAmSat any receipt or other official evidence of [***] it receives in respect of such Buyer Indemnified Taxes. 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). [***] Filed separately with the Commission pursuant to a request for confidential treatment. 26 If any Additional Amounts paid by Buyer are based on rates of [***] or [***] in [***] of the appropriate rate applicable to payments to PanAmSat and, as a result thereof, PanAmSat is entitled to make a claim against the jurisdiction imposing such Tax for refund or credit against future withholdings of such [***] then PanAmSat shall, upon Buyer's request, assign and transfer all right, title and interest to any such claim for a refund or credit of such [***] to Buyer and shall take such reasonable actions as may be necessary to vest such right, title and interest in Buyer. Buyer shall keep PanAmSat informed of all material aspects of such claims for refund or credit. If PanAmSat is able to claim a credit against its income tax liability in the country of its incorporation for [***] Taxes with respect to which Buyer has paid Additional Amounts hereunder not previously refunded pursuant to the preceding sentence, PanAmSat will notify Buyer and upon the reasonable request of Buyer, PanAmSat shall seek such credit and, if and at such time that PanAmSat actually receives economic benefit of such claim (e.g., a refund or a credit against taxes that would be otherwise immediately due and payable), PanAmSat shall pay to Buyer the amount of the economic benefit so received, it being understood that Buyer shall have no right to participate in or control any of PanAmSat's tax positions, filings, contests, or claims for refund, except as provided in the previous paragraph. (b) PanAmSat's Responsibility. PanAmSat shall be responsible for, and shall indemnify Buyer against, all Taxes imposed with respect to the purchase, sale, use or ownership of Buyer's Transponders or with respect to payments under this Agreement by (x) [*********] which for purposes of this Section 3.5 shall be deemed to include any [***************] or any political subdivision thereof, or (y) any [******] towhich PanAmSat directs [***] hereunder to be made, to which Buyer makes payments hereunder pursuant to an assignment of PanAmSat's rights hereunder or in which such assignee is [***] or has its [************] in each case including any political subdivision or taxing authority thereof or therein (any of the foregoing a "PanAmSat Country"), except to the extent of: (i) Any Taxes [***] on Buyer by reason of its having an [*********] or [******] of business in, or other connection with, the [***] or any PanAmSat Country, other than a connection consisting solely of the [***] of Buyer's Transponders or [***] Filed separately with the Commission pursuant to a request for confidential treatment. 27 the execution and performance of Buyer's obligations required pursuant to this Agreement; (ii) any Taxes imposed on Buyer solely by reason of the [***] of Buyer to provide, at the written request of PanAmSat, any documentation or certification reasonably required to be made to [******] from, or [***] of, such Taxes; or (iii) in the case of an assignment of Buyer's rights under Section 10.5 to any entity organized or domiciled outside [***] any [******************] that would have been imposed on Buyer had no such assignment occurred. 3.6 Reconstitution of Agreement. Each party agrees to negotiate in good faith, if so requested by the other, to seek to [***] this transaction to [*********] while [***] the [******] of the parties. The [***] to reach such a [***] agreement shall not, however, affect the continuing validity of this Agreement. ARTICLE 4. BUYER'S OBLIGATIONS IN USING THE BUYER'S TRANSPONDERS. 4.1 Non-interference and Use Restrictions. Buyer's transmissions to and from each of the Satellites and its use of the Buyer's Transponders 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). Buyer will follow established practices and procedures for frequency coordination and will not use the Buyer's 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 Satellites, or any other satellite or transponder on such satellite, or cause physical harm to the Buyer's Transponders, any other Transponder, the Satellites, or any other in-orbit satellite or transponder on such satellite. Provided that Buyer's transmissions conform with the transmission plans approved by PanAmSat under Section 1.5 above, Buyer complies with the Operational Requirements, as the same may be modified as provided above, and Buyer immediately ceases any transmission upon being notified by PanAmSat of any violation of this Section 4.1 (even if such transmission is in conformity [***] Filed separately with the Commission pursuant to a request for confidential treatment. 28 with the Operational Requirements), Buyer 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, Buyer shall be responsible for the provision, installation, operation and maintenance of all earth station facilities and equipment ("Buyer-Provided Facilities"), for transmitting signals to, or receiving signals from, the Satellite(s) in accordance with the requirements set forth in this Agreement. Buyer shall also be responsible for acquiring all authorizations necessary for installation and operation of Buyer-Provided Facilities. Buyer shall be permitted to contract with third parties to transmit its signals to, or receive its signals from the Satellite(s); provided, that, Buyer 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(s). If Buyer retains third parties (other than PanAmSat) as permitted by the previous sentence, these third parties' facilities shall be deemed to be Buyer-Provided Facilities and the acts and omissions of these third parties in connection with the transmission or reception of Buyer's signals shall be deemed to be the acts and omissions of such third parties and of Buyer. Any provision by PanAmSat (or by an affiliated company) to Buyer of earth station or other terrestrial facilities or services shall be the subject of a separate agreement. [******************************************************************** ****************************************************************************** ****************************************************************************** ****************************************************************************** ****************************************************************************** ****************************************************************************** ****************************************************************************** ********************************************************************] 4.3 Buyer's Transmitting Stations. Buyer will configure, equip and operate its transmit facilities so that the interface of these facilities, in space, with the Satellites shall conform to the characteristics and technical parameters of the Satellites. Buyer will follow PanAmSat's procedures for initiating or terminating any transmission to the Satellites. Buyer will operate all transmit facilities in a manner that allows for cessation of, and will cease, transmission immediately upon receiving notice from PanAmSat [***] Filed separately with the Commission pursuant to a request for confidential treatment. 29 under Section 15.5(a) ("Telephone Notices"). Buyer 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 Buyer's Transponders upon notice by PanAmSat. PanAmSat shall have the right, but not the obligation, subject to such reasonable confidentiality and use restrictions as Buyer may impose, to inspect any Buyer-Provided Facilities together with associated facilities and equipment used by Buyer, or by a third party under the authority of Buyer, to transmit to the Buyer's Transponders. PanAmSat will use all reasonable efforts to schedule inspections to minimize the disruption of the operation of the facilities, and Buyer shall make the facilities available for inspection at all reasonable times. Buyer 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 Satellites, their 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 them for its own services, follow these restrictions itself) in a consistent and nondiscriminatory manner vis-a-vis Buyer and the other customers with a right to uplink to the Satellites. Allowing for the fact (understood and accepted by Buyer) 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 andfacilities may require the application of different restrictions to achieve the same non-interference and satellite protection goals, PanAmSat shall not require Buyer 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 Confirmed Outage. There shall be deemed to have occurred a "Confirmed Outage" of a Buyer's Transponder if a Buyer's Transponder fails to meet the Performance Specifications for a continuing and uninterrupted period of [*********] (or, if [***] is [***] a [***] period of [*********] or [***] during any [*********] and such failure is confirmed by PanAmSat. Any "Warranty Credit" (as defined below) shall be measured in accordance with the procedures set forth in Section 5.2. 5.2 Warranty Credit. If there is a Confirmed Outage of a Buyer's Transponder: on PAS-3 [************] of the Delivery Date of PAS-3; on PAS-6 [************************] of the Delivery Date of PAS-6 (but only [************************] of PAS-6 if Buyer exercises its termination [***] under Section 7.9 hereof); or within [******************] of Delivery Date of PAS-6B (for each Satellite, the "Warranty Period"), PanAmSat shall credit to Buyer's next Installment payment a "Warranty Credit" that shall be determined by the following formula: Warranty Credit [***] [************] [***] [******************************************************************************* *****************************************] [*********************************] [******************************************************************************* **********************************] Buyer shall not be entitled to any Warranty Credit for any Transponder failure that does not constitute a Confirmed Outage. For purposes of determining Warranty Credits, each failure that is confirmed by PanAmSat shall be measured as commencing from the later to occur of (i) Buyer's cessation of use of the affected Buyer's Transponder and (ii) notice from Buyer to PanAmSat of such failure (provided that the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 31 affected Buyer's Transponder is, in fact, not meeting the Performance Specifications). Any such failure shall be deemed to have ended upon the earlier to occur of (i) Buyer's resumption of use of the affected Buyer's Transponder and (ii) notice to Buyer from PanAmSat that the affected Buyer's Transponder has been restored to the Performance Specifications (provided that the affected Buyer's Transponder is, in fact, meeting the Performance Specifications). No Warranty Credit shall be provided for any failure of a Buyer's Transponder that occurs after the [******] such Transponders at such point being available, if at all, on an "as is" basis; nor shall a Warranty Credit be provided during the [******] for any Transponder that is not one of the Transponders being [***] for as part of the [******]. 5.3 Transponder Failure. If, after the applicable Delivery Date for a Satellite, a Buyer's Transponder fails to meet the Performance 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 Buyer to PanAmSat of such failure (provided that the affected Buyer's Transponder is, in fact, not meeting the Performance Specifications). Any such failure shall be deemed to have ended upon notice from PanAmSat to Buyer that the affected Buyer's Transponder is capable of meeting the Performance Specifications (provided that the affected Buyer's Transponder is, in fact, meeting the Performance Specifications); provided, further, that if PanAmSat enters into an agreement to provide Ku-band capacity from the Satellite on which a Buyer's 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 hasoccurred for Buyer's Transponder on the same Satellite under this Agreement using the time periods specified in such other agreement. In the event a Buyer's 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- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 32 needed, first-served basis as among Buyer and other Transponder owners, lessees, and users, including without limitation, PanAmSat and its predecessors in interest ("Protected Parties"), as a substitute for a Buyer's Transponder equipment unit which has failed; provided, that PanAmSat may elect to use "Substitute Capacity" on the same Satellite as the failure shall have occurred (as provided below), if available and not subject to any additional operational restrictions that Buyer is not willing to accept, in lieu of using Spare Equipment. Buyer acknowledges and agrees that the Spare redundancy plan of each Satellite may require PanAmSat to reassign certain traveling wave tube amplifiers ("TWTAs") among Transponders to make use of a Spare. 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 Buyer, Buyer shall, on notice from PanAmSat, cease transmitting to the applicable Buyer's Transponder(s) to allow the TWTA that is assigned to its Transponder(s) to be reassigned and a different unit (that meets the Performance Specifications) to be put in its place. PanAmSat shall use all reasonable efforts to keep to a minimum the time during which Buyer is required to cease transmitting under this paragraph, in accordance with good engineering practices, to make the shift in the assignments. If (a) a Buyer's Transponder fails to meet its Performance Specifications on a Confirmed Basis, and (b) the Spare Equipment associated with such Buyer's Transponder is not available, and (c) equivalent capacity on another Transponder meeting the Performance Specifications in the Brazil Beam of the same Satellite as the failure shall have occurred and designated by PanAmSat for DTH use (the "Substitute Capacity"), is available, and its use by Buyer in accordance with PanAmSat's Operational Requirements would not be predicted to interfere with the use or rights of others using the Satellite (or, even if no longer used by Buyer, PAS-6 or PAS-6B), then PanAmSat shall, as soon as possible and to the extent technically feasible, employ such Substitute Capacity for the failed Buyer's Transponder to satisfy PanAmSat's obligations under this Agreement. PanAmSat may condition its provision of Substitute Capacity on Buyer's acceptance, in writing, of such additional restrictions on its use that PanAmSat in good faith believes are necessary so as to protect other Protected Parties from interference. If Buyer does not accept such conditions, PanAmSat shall not be obligated to provide Buyer with the Substitute Capacity. In the event that PanAmSat employs such Substitute Capacity for a Buyer's Transponder, such Substitute Capacity 33 shall be deemed to be such Buyer's Transponder for all purposes under this Agreement. If title to the Buyer's Transponder has already passed to Buyer upon any substitution of capacity as provided above, the title to the capacity that is employed for Buyer shall be deemed transferred to Buyer and title to the capacity previously supplied to Buyer shall be deemed to be transferred back to PanAmSat, in all cases free and clear of all liens, claims, and encumbrances, except if created by action or failure to act of the party that would be the recipient of the title. In confirmation thereof, Buyer and PanAmSat each agrees to execute such documents of conveyance as the other may reasonably request to confirm that such transfers have occurred. In the event that [*********] Transponders [****************] to meet their respective [***] or [******] and are entitled to [***] under any applicable agreement with PanAmSat, and if all of said Transponders are assigned to Buyer and [*********] then, unless PanAmSat receives contrary instructions signed by Buyer and[*********] PanAmSat shall, to the extent [************] to the [******] in accordance with the [******] to be supplied and executed by Buyer and [*********] and delivered to PanAmSat, except that priority will not be given to the [***] Transponders. Until and unless such fully executed instructions are received by PanAmSat, such [******] shall be made by PanAmSat in [*********]. Upon the written request of all affected parties, PanAmSat shall, if it has not already [************] at the time that the request is made, in any case of [******] or if the use of Spare Equipment would require the [***] of the [***************] for instructions for up to [************] provided that, the [***] shall be deemed to have [***] at such point as PanAmSat notifies Buyer that PanAmSat is [***] to[************] pending the [************]. 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[******************]. In the event that [*********] Transponders [****************] to meet their respective [***] or [******] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 34 and are entitled to [***] under any applicable agreement with PanAmSat, and if one or more of said Transponders is assigned to a person or entity other than Buyer or[*********] then the Protected Party who [******] 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 [******] or 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; provided further that, [******] as between Buyer [***************] shall be determined in the same way that [*********] Buyer and the [*********] are to be determined under the preceding grammatical paragraph. 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[******************]. PanAmSat hereby confirms that the only [******] for a [************] that [************] this one (as deemed below and other than with [***] is with [*********] for [*********] Transponder and that there are [*********] for PAS-6 or PAS-6B. For purposes of this Section 5.3, this Agreement and the "Multi-Country Agreement" shall all be deemed to be executed simultaneously as of February 29, 1996. 5.4 Reduction in Number of Transponders as Overall Power on the PAS-6 Satellite is Decreased. Buyer acknowledges that it has been advised by PanAmSat that it [************************] on PAS-6 and that it is anticipated that [******] will be subject to such a power constraint in the future, so that the remaining Transponders continue to meet their applicable Performance or Service Specifications. This power on PAS-6 is [***] sufficient to support [**********] consistent with the [***] set forth in Section 3.1(c)(iii). When [******] can be anticipated, before [***] one of Buyer's Transponders, PanAmSat shall [***] with Buyer and all other entities who [***] Filed separately with the Commission pursuant to a request for confidential treatment. 35 have agreed to purchase or take service from the Satellite and, provided that it is consistent with [************] and [***] of the Satellite, shall allow Buyer and such other entities [***] to select which Transponder(s) shall be[***]. To be effective, such selection must be given in writing, signed by Buyer and all other entities referenced in the previous sentence, and given to PanAmSat before PanAmSat is required, as determined by [************] to proceed with the [***] of Transponder(s). If PanAmSat has not received such instructions, signed by all affected entities, at the time that [***] is required, PanAmSat shall make the decision as to which Transponder(s) [******************]. The [***] of a Buyer's Transponder under this Section 5.4 shall be treated as a [******] and shall [***] toward determining whether the applicable Transponder has[***************]. This paragraph is not anticipated to be relevant to [************] but the principles stated will apply if it becomes necessary to do so; provided that it is agreed that the first of Buyer's or [***************] Transponders to be [***] shall be the [***] Transponders. If this Agreement is terminated as to PAS-6B without a PAS-6B Delivery Date (and, therefore, Buyer remains on PAS-6), the then current [******] on PAS-6 will be addressed, in accordance with the preceding paragraph, subject to the following qualifications: (a) Within five (5) days of termination of this Agreement as to PAS-6B, PanAmSat shall notify Buyer [***************] as to the number of Transponders on PAS-6 that [*********] at that time with existing PAS-6 power. For the avoidance of doubt, the power [***] set forth in Section 3.2(c)(iii) above shall not be considered for such purpose. (b) If [*********] will also be remaining on PAS-6 [***************] then Buyer and [*********] shall have fifteen (15) days to select by [*********] to PanAmSat which PAS-6 Transponders should be [************] to leave [***] the [***] number of Transponders specified in PanAmSat's notice, which selection PanAmSat shall follow as long as consistent with the overall health and performance of the Satellite. If Buyer [*********] fail to give such notice within the time period specified, PanAmSat shall make the selection and so notify Buyer [*********] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 36 within ten (10) days of the last day that Buyer [************] had to make such selection. Until the selection is made, Buyer shall not increase its [***] of PAS-6 above that which is permitted during the Interim Period, except with [*********] written consent delivered to PanAmSat (but, in all events, when [***] with [************] within the overall Transponder power limits of PAS-6). The selection, once made, shall be deemed made retroactive to the day that this Agreement was terminated as to PAS-6B, with any Buyer's Transponder on PAS-6 then specified to be [***********] deemed to have [***************] as of that date. Any further [******] shall be handled in accordance with the general provisions of this Section 5.4. (c) If [*********] will not be remaining on PAS-6, then (subject to any "Dual Illumination Period" rights it may have under the [*********] Buyer would only have to [************] Buyer's Transponders in the event that there is not [******] on PAS-6 to support Buyer's Transponders, in which event the procedures set forth above would apply (but without requiring any concurrence by[************]). 5.4A Limitation on Buyer Discretion. Sections 5.3 and 5.4 notwithstanding, if Buyer exercises its right to select which Transponder to [*********] under those Sections in such a manner that the Minimum Complement for the [***] Beam of the Primary Satellite is [***] when a different selection would have resulted in that Minimum Complement being preserved (and no other Minimum Complement [***]), for purposes of this Agreement, there shall be deemed to be [******] of Minimum Complement; provided that if there is a further failure on a Confirmed Basis of Transponder capacity on the applicable Brazil Beam (other than that which could have been avoided by a different selection), the Minimum Complement will then be deemed[************]. By way of example only, if, after PAS-6B is Delivered (i) only [***] of Buyer's Transponders remain under this Agreement, while Service from [******] Transponders to be provided on PAS-6B to Multi-Country Platform continues; (ii) a [************ ********] under Section 5.4; and (iii) Buyer and [************] elect to have [************************](so that the number of Buyer's Transponders is reduced to [***] in the [***] Beam), instead of a Transponder assigned to [******] Buyer's Minimum Complement shall not be deemed[*********]. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 37 5.4B. Special Considerations Relative to the Operation of PAS-6 and PAS-6B at the [*********]. It is not contemplated that, except during the Dual Illumination Period specified herein, NetSat [************] would receive capacity from different Primary Satellites (i.e., one on PAS-6B and the other on PAS-6). The situation[******], however, if at the time of the PAS-6B Delivery Date, the applicable Minimum Complement on PAS-6B can only be met for one of these entities, leaving the other on PAS-6. (For reference, when PAS-6 or PAS-6B serves as the "Primary Satellite" (as defined in the[*********]) for[*********], but not NetSat, that Satellite is referred to in this Section as the "Other Satellite.") In such circumstances, after the Dual Illumination Period and during such period in which the PAS-6 and PAS-6B each serves as a "Primary Satellite," one for NetSat and the other for[*********], the following provisions shall apply: (1) In the event that this Agreement is to be terminated as to any individual [***] Transponder pursuant to Section 7.3, whether due to a particular Transponder failure or an overall [******] on the Satellite, to the extent technically feasible, [***] shall have the right to select as to which Transponder this Agreement shall be terminated, provided that [***] selection leaves NetSat with as many Transponders in the [***] Beam that meet their Performance Specifications as would be available had [***] not exercised this right. (2) In the event that the Buyer's Transponders are on PAS-6B while the [*********] has terminated as to PAS-6B and is operating on PAS-6, Buyer acknowledges that, due to limitations on the co-frequency operation of transponders on PAS-6 and PAS-6B, it may be necessary to [***] one or more of Buyer's PAS-6B Transponders or the [************] PAS-6 Transponders to prevent interference to a transponder operated by the other Platform on the Other Satellite, and that, in such event, the [************] subject to [***] shall be Buyer's [***] Transponders. In no event, however, shall either of the [***] Transponders be [***] to permit use of a Transponder on PAS-6 or PAS-6B by PanAmSat or a third-party customer [*********************] of PanAmSat. Furthermore, if Transponders are [***] under this paragraph, such [***] shall not reduce the Minimum Complement, and any Transponders [***] shall be considered [******************************************************************** *************************.] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 38 (3) PanAmSat shall operate the PAS-6 and PAS-6B Satellites in a manner so that their telemetry signals do not interfere with each other. (4) For the avoidance of doubt, there is no obligation of PanAmSat to provide or for Buyer to take inter-Satellite protection (e.g., Transponders from either PAS-6 or PAS-6B as substitutes for the other). 5.5 Buyer Cooperation. If a Buyer's Transponder fails to meet the Performance Specifications, Buyer 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 Buyer. These obligations of Buyer 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 Buyer's use of the Buyer's Transponders, Buyer shall do so to the extent it can with existing equipment; and (b) Permitting PanAmSat, at PanAmSat's [***] and at PanAmSat's cost and expense, to upgrade the Buyer-Provided Facilities. 5.6 Application to Individual Buyer's Transponders. All determinations of failures on a Confirmed Basis, protection rights and Confirmed Outages to be made under this Article 5 shall be made on an individual Buyer's Transponder by Buyer's Transponder basis. 5.7 Replacement Launch. Pursuant to the prior agreement covering PAS-6 and PAS-3 between the parties, payments from Buyer to PanAmSat totaling [***] toward a possible Loral replacement satellite are acknowledged; [***] of said amount has already been or will be applied to offset Buyer's obligation hereunder. It is further acknowledged that the remaining [***] is[******]. ARTICLE 6. PREEMPTIVE RIGHTS. 6.1 (a) Preemptive Rights In Abnormal Circumstances. Buyer recognizes that it may be necessary, in unusual or abnormal technical situations or other unforeseen technical conditions, for PanAmSat deliberately to preempt or interrupt Buyer's use of one or more of the Buyer's Transponders, solely in order to protect the overall health and performance of the Satellite(s). Such decisions shall be made by PanAmSat in its sole [***] Filed separately with the Commission pursuant to a request for confidential treatment. 39 discretion, exercised in good faith. To the extent technically feasible, PanAmSat shall give Buyer 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 affected Satellite. Buyer shall immediately cease transmissions to the Buyer's Transponder(s) at such time as its use of the Buyer's Transponder(s) preempted or interrupted pursuant to this Section. To the extent that such preemption results in a loss to Buyer of its use of a Buyer's Transponder sufficient to constitute a Confirmed Outage or a failure on a Confirmed Basis, Buyer shall have all the rights and remedies regarding Warranty Credits and termination set forth in Articles 5 and 7. (b) Testing in the Event of Failure. If a Buyer's Transponder is not meeting Performance Specifications, but Buyer elects to continue to use (and pay for) the Transponder, as degraded, PanAmSat may, with Buyer's reasonable consent as to the time such action will be taken, interrupt Buyer's use as necessary to perform testingor take any other action that may be appropriate to attempt to restore the affected Transponder(s) to the Performance 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 Buyer 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 Performance Specifications, including the use of Spare Equipment and Substitute Capacity and termination for failure to meet Performance Specifications shall be commensurately delayed. ARTICLE 7. TERMINATION RIGHTS. 7.1 Termination for Delay in Launch of PAS-6B. If: (a)(i) a [************] (as defined below) occurs prior to [************] and (ii) (A)PanAmSat notifies Buyer that either: (x) Hughes has not shipped (i.e., put in transport) the PAS-6B Satellite to the launch site by [************] unless the delay was due to the unavailability of the launch vehicle or other "Hughes Force Majeure" event, as defined below or (y) the Delivery Date of PAS-6B will not occur by [************] (either which notice PanAmSat will give if circumstances [***] Filed separately with the Commission pursuant to a request for confidential treatment. 40 make it clearly ascertainable that this is the case) or (B) the Delivery Date does not occur on or before [************]; Or (b) whether or not a [*********] has occurred as of [************] if (A) PanAmSat notifies Buyer that the Delivery Date of PAS-6B will not occur by [*********] (which notice PanAmSat will give if circumstances make it clearly ascertainable that this is the case) or (B) the Delivery Date for PAS-6B does not occur by [**********] Then At any time prior to the launch of PAS-6B, Buyer may terminate this Agreement as to PAS-6B on [******] days' notice to PanAmSat, unless, in the case of clause a(ii)(A)(x) the required event takes place within said [******] days notice period. It is further agreed that, in the case of clause (a)(ii)(A)(x), Buyer may give its notice, ifthe other circumstances for such notice are met, as early as [************] so as to make PanAmSat's cure period coincide with the [*********] deadline. The foregoing notwithstanding: (i) Buyer shall not be permitted to terminate this Agreement as to PAS-6B under this Section 7.1 as to a delayed event if it occurs within thirty (30) days of the date as Buyer may have been previously notified that the relevant event was anticipated to occur without Buyer exercising its termination right within thirty (30) days of said notice; provided that, if Buyer's termination right accrued before the occurrence of a [*********] and there subsequently occurs a [*********] Buyer shall have another thirty (30) days (from the [*********]) to make its decision to terminate, whether the [*********] occurs before or after [*********] except that this further right to terminate will not accrue if, at the time of the [************] PAS-6B has already been shipped (i.e., put in transport) to the launch site and the Delivery Date of the Satellite is scheduled to occur within sixty (60) days of the [*********]; and (ii) Buyer shall also not be permitted to terminate this Agreement under this Section 7.1 unless at the same time [************* **************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 41 *******************] as to PAS-6B under [***************]Agreement. PanAmSat shall also be permitted to terminate this Agreement as to PAS-6B on notice to Buyer, if the construction or launch of PAS-6B has been substantially delayed [***************] by force majeure conditions and PanAmSat determines because of force majeure conditions not to proceed with the construction or launch of PAS-6B. In such event, PanAmSat shall give Buyer immediate notice of PanAmSat's determination, which determination shall be made promptly following the event(s) of force majeure that lead to such a determination. In any circumstances in which Buyer has a right to terminate under this Section 7.1 and Buyer's time period for decision overlaps the time period during which PAS-6B is scheduled to be shipped to the launch site, PanAmSat may require Buyer to accelerate its decision process so that a decision is made before PAS-6B is actually shipped. 7.1A. [**********************************************]. If there is a [******************] prior to the launch of PAS-6B, Buyer shall be permitted to terminate this Agreement asto PAS-6B on notice to PanAmSat to be exercised within thirty (30) days of the [******] (but in all events prior to the launch of PAS-6B); provided that [********************** ******************* *******************] as to PAS-6B under [***************] agreement. In such event, within [*********] of invoice from PanAmSat, Buyer shall [******] for [********************************* ***************] to [************] in connection with the terminated PAS-6B program, provided that [******] to [***] in connection with said termination shall be reduced by whatever amounts [***********************] in connection with its [*********] to [***] under [***************************] and further provided that PanAmSat shall [******] to Buyer or [************] as they shall [***] direct PanAmSat in writing, any [******************************** ******************] given to [***] of such [******] in connection with any mitigation of such liability that may be available, which [***] shall use all reasonable efforts to enforce. The contract [***************] that Buyer [************] are [**************** ************************************** **********************] in the event of a [***************] by PanAmSat, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 42 to use******************************************* [************************************************************************* *************************************]. In addition, if PanAmSat elects [***] proposal (which PanAmSat agrees to do if Buyer [***************] have [*********] required to be [******************] under this Section 7.1A and the [*****************************] Buyer and [*********] are [****************************************************** ****************** *************************************************************] from the above. If [*********] does not [****************************************] as to PAS-6B under the [******************] Agreement, Buyer's notice of termination under this Section 7.1A shall be treated as an [*******************] which, within thirty (30) days of receipt, PanAmSat may either (in writing) [***] or, instead, [***] but, if[***] grant Buyer the right to [***] the Buyer's Transponders on a [********************************************************] subject to Buyer's [******] to PanAmSat as to[*********]. If PanAmSat [***] (in writing) Buyer's [***] termination under this paragraph (i.e., in circumstances where [********************************************************************** ********************] neither Buyer nor PanAmSat would have any further obligation to each other with respect to PAS-6B. 7.1B Certain Definitions Relevant to Termination Provisions. As used herein: (i) [********************] means [***] of a sufficient number of Transponders on [*********] to [********************************************* ********************] such that either: (A) On or before [**********************] there is [********************] (Buyer's rights otherwise under Sections [********** ******************************] notwithstanding) on [**********] that PanAmSat makes, or if permitted by Buyer or [*************] could make, available to NetSat, [***************], and under PanAmSat's [************************* ************] to [***] that would yield at least [*********] on each of the [******************************] and the [***] of [***] (in each case when [***] with [***] from the associated [**************************************** ***************] that meet their applicable [********************************] or [***] Filed separately with the Commission pursuant to a request for confidential treatment. 43 (B) On or before [*********] there is [************** *******] (Buyer's rights otherwise under [****************************** ********************] notwithstanding) on [*********] that PanAmSat makes, or if permitted by Buyer or [*********] could make, available to NetSat, [*********] and under PanAmSat's [*********************] to[***] that would yield at least [*********] on each of the [*******************************] and the [****************] (in each case when [***] with [***] from the associated [**************************************] respectively) that meet their applicable[************************]; unless (C) PanAmSat is able (as to either (A) or (B)) to [***] a sufficient number of Transponders to [****************************** **********************] within thirty (30) days of their applicable [***] (i.e., as provided in [***] of the Agreement, with respect to normal [******]) so that the applicable level of [******] defined immediately above is not met; provided that PanAmSat shall notify Buyer if and as soon as it becomes clearly ascertainable to PanAmSat that sufficient [***] to a level so that the [******] standard specified above will no longer be met is not possible, at which point Buyer's notice of termination shall be effective, even if less than thirty (30) days after the point at which the [******] first occurred. Said cure period notwithstanding, for purposes of Section 7.1 and Section 7.1A, subject to PanAmSat's cure rights in (C), the timing of the [******] shall be deemed to have occurred when the [******] standard in either (A) or (B) is met and Buyer's right to give notice of termination (and period in which it has such right), subject to PanAmSat's cure rights, shall commence at the point of such cumulative failure; and (ii) "Hughes Force Majeure" means any delay that is caused by act of God, or of the public enemy, fire, flood, earthquake, epidemic, quarantine restriction, strike, walkout, freight embargo, or any other event which is beyond its control or does not arise from the acts or omissions of Hughes or its respective subcontractors. 7.2 Other PAS-6B Pre-Delivery Termination. This Agreement shall also terminate as to PAS-6B in either of the following events: (i) PAS-6B suffers a "Launch Failure" or (ii) if, after a launch, which is not a Launch Failure but before the PAS-6B [***] Filed separately with the Commission pursuant to a request for confidential treatment. 44 Delivery Date, the Minimum Complement of the Buyer's Transponders on PAS-6B are not capable of meeting the Performance Specifications unless Spare Equipment is provided by PanAmSat in accordance with Section 5.3 so that the Minimum Complement of the Buyer's Transponders is provided in accordance with their Performance Specifications; provided that, if (A) one or more (but not the Minimum Complement) of the Buyer's Transponders are capable of being provided in accordance with their Performance Specifications, and (B) at the time, at least as many Buyer's Transponders on PAS-6B are capable of meeting their Performance Specifications as Buyer's Transponders on PAS-6 are capable of meeting their Performance Specifications, termination under this clause (ii) shall be at Buyer's [***] exercisable (if at all) within fifteen (15) days of Buyer's receiving notice of this condition. If Buyer fails to exercise the termination right set forth in the previous sentence within the time specified, the Buyer's Transponders meeting the Performance Specifications, if PanAmSat so elects on notice to Buyer within ten (10) days of the last day for Buyer to have exercised its termination right, shall be deemed accepted under Section 2.1 above. As used herein, "Launch Failure" means an event prior to the PAS-6B Delivery Date that results in the destruction of PAS-6B or the declaration of PAS-6B as a total loss (which includes a constructive total loss) under PanAmSat's launch and initial operations insurance policy for PAS-6B. 7.3 Termination For Failure After the Delivery Date. Subject to Section 2.4, on a Transponder by Transponder basis, this Agreement shall automatically terminate if, after the applicable Delivery Date for the Satellite, a Buyer's Transponder fails on a Confirmed Basis, unless, within thirty days of such failure, PanAmSat restores the Transponder to its Performance Specifications using, if required, any available Spare Equipment or replaces the Transponder with Substitute Capacity from the same Satellite. In the event one or more of the Buyer's Transponders fails on a ConfirmedBasis and PanAmSat does not restore or replace the Transponder so that the Performance Specifications are met, but one or more of Buyer's Transponder(s) still meet the Performance Specifications, this Agreement shall continue as to the remaining Buyer's Transponder(s), so long as the Minimum Complement (already defined for PAS-6B; [***] Brazil Beam Transponders for PAS-6, including any available PAS-3 Brazil Beam Transponders during the Interim Period and any Brazil Beam PAS-3 Transponders that Buyer has elected under Section 1.2 above to retain thereafter) of Transponders applicable to the Satellite (or, as to the applicable Satellite, on and after [***] Filed separately with the Commission pursuant to a request for confidential treatment. 45 the date that is [*********] after the Delivery Date of Buyer's Transponders on said Satellite, such lesser number of Buyer's Transponders as Buyer was actually using for the provision of DTH Service to Brazil 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 Performance Specifications. Subject to Section 5.4A above, if the applicable Minimum Complement cannot be provided, as to the remaining Transponders on the affected Satellite, said termination right shall apply to all of the Transponders on the affected Satellite (and under Section 7.8 below, at Buyer's [***] to previously retained Transponders on PAS-3). A termination of this Agreement in applicable part for loss of a Minimum Complement 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 Buyer's[***] if within said six-month period, Buyer enters into a binding agreement to take transponder capacity for the provision of its DTH Service from PanAmSat or another provider, Buyer may, in its notice of termination, make its termination effective upon the date that such other capacity is available to Buyer; provided that, pursuant to Section 1.7(b)(ii), Buyer shall have first sought such capacity from PanAmSat but PanAmSat was unable to provide the requested capacity within comparable period of time. In such event, Buyer shall notify PanAmSat of the projected date of such availability and of any change thereto. If Buyer 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 Buyer's Transponders that continue to meet their applicable Performance Specifications (thereafter, that lower number being the "Minimum Complement"). 7.4 Satellite [************]. PanAmSat may determine to take a Satellite [*********] or, in the case of clauses (d) or (e) below, relocate it to other use if: (a) in PanAmSat's [*********], the remaining [***] on board the Satellite is [*********] to maintain [************************ ********************************] allowing sufficient [*********] the Satellite; (b) with respect to [***] the Satellite [************] or more [***] Transponders or [***************] Transponders to meet their applicable performance or service specifications; [***] Filed separately with the Commission pursuant to a request for confidential treatment. 46 (c) (i) with respect to PAS-6, the Satellite [******************] or more Transponders to meet their applicable performance or service specifications or (ii) with respect to PAS-6B, the Satellite suffers failure of sixteen (16) or more Transponders to meet their applicable performance or service specifications; (d) with respect to PAS-6 or PAS-6B, the total of the number of Transponders on the Satellite that have failed to meet their applicable performance or service specifications and, even if they have not failed themselves, the number of Transponders for which [*********] under the [************************************************************************** ********] or more for [***] or [***] or more for [***] (e) with respect to the Primary Satellite, Buyer or Multi-Country Platform has agreed to [****************************************] at such time that said Successor Satellite is ready to be placed into commercial service. In such event, PanAmSat shall promptly notify Buyer of such determination and [************************************************] or (f) with respect to PAS-6B, at any time that a Successor Satellite is ready to be placed into commercial service, but not earlier than the earlier of: (i) the date that is [*********] after the PAS-6B Delivery Date, or (ii) the date on which the Satellite is predicted by PanAmSat in its good faith judgment, to have remaining fuel on board PAS-6B for only [******] (or less) life, assuming ordinary stationkeeping operations, plus sufficient fuel to de-orbit the Satellite (the "Time for Early Replacement"). The foregoing notwithstanding, in the case of clause (c), if: (i) Buyer agrees to make a [*********************************************** *****************************] as defined in and determined in accordance with Article 16 of this Agreement, (ii) [***************] Installment payments required to be paid under this Agreement, Buyer [************************ *****************************************************************] of the Satellite after the occurrence of the [***] otherwise giving rise to PanAmSat's rights under clause (b) (less any [******] with respect to the same Satellite for the same period under Section 3.2 above), and (iii) permitting [***************] PanAmSat's [***************] for the Satellite (other than as to the Buyer's Transponders that would still be [***] Filed separately with the Commission pursuant to a request for confidential treatment. 47 [********* ***************] PanAmSat will not take[********************* *********] pursuant to this clause (c) until the[**************************** ****************************************]. On the date that the Satellite is [***************], this Agreement shall [******] as to the [***] Satellite. 7.5 Termination By PanAmSat For Cause. PanAmSat may terminate this Agreement if Buyer 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) Buyer 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 Buyer; (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 Buyer immediately reimburses and indemnifies PanAmSat for all such damage, or (c) to cease any other activity in material violation of Buyer's obligations under this Agreement, other than any part of Section 1.7, 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 balance of the remaining Installments (principal and interest as if not prepaid) for all of the Buyer's Transponders based on the then predicted life of the Satellites (and, in the case of PAS-3 and PAS-6, if the Transponders are still subject to trade-in under Section 1.2 or Section 1.2A, the date of such contemplated trade-in, and, in the case of PAS-6 (if no longer subject to trade in), if the termination right specified in Section 7.9 is still available, through the [*****************] PAS-6 Delivery 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 [******] Buyer shall be responsible for payments of the remaining Installments that would be otherwise due and as they would otherwise become due on and after the date of such termination; provided that if Buyer fails to make payment of any such amount due and [***] Filed separately with the Commission pursuant to a request for confidential treatment. 48 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 Installments (principal and interest as if not prepaid), discounted for present value as provided above. The foregoing notwithstanding, with respect to PAS-6, if the termination right under Section [***] has been exercised, Buyer's termination liability under this Section 7.5 shall be limited to the amount of [*******************************] through the [******] of the PAS-6 Delivery 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 Buyer's Transponders or to [******] on such Transponders to [***] PanAmSat [******] and Buyer shall [*********] to any [******] with respect to such [***] or any [***] of amounts paid to PanAmSat; provided, as follows: In the event that Buyer 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 Buyer's Transponders and in the event PanAmSat subsequently reaches an agreement to provide service to a [******] a Buyer's Transponder during the period that said Transponder would have otherwise been made available to Buyer hereunder, PanAmSat shall [***] to Buyer as a [***] of the Termination Payment(s) any [******] it receives from [*********] with respect to the use of such Buyer's Transponder during such period, up to the amount paid by Buyer for such Buyer's Transponder for its use during such period over and above all Installments that were paid or due prior to the date that this Agreement was terminated, less (i) any amounts owed by Buyer to PanAmSat under this Agreement; (ii) any [******] (including [***************] by PanAmSat in [*********] such amounts from Buyer; (iii) any other [*********] by PanAmSat as a result of Buyer's breach of its obligations hereunder; (iv) any [******] (including [*********] by PanAmSat in [***] such Buyer's Transponder to, or [************] 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 49 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 [******] nor shall PanAmSat be obligated to [***] the Buyer's Transponders [***] of any other [***] that PanAmSat may also have available. Buyer 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[*****************]. 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 Buyer and any Buyer Company, Buyer 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, Buyer (or a third party on Buyer'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, Buyer 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 Buyer of the existence of a Payment Force Majeure and PanAmSat shall, in fact, have been permitted to draw down such amount (so that Buyer's total permitted late payment under this paragraph is no more than sixty (60) days); (ii) Buyer 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) Buyer uses all commercially reasonable and legal methods to have payment made as soon as possible, from sources (including, on Buyer's behalf, from Buyer 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 50 such circumstances, if within one hundred and eighty (180) days of the permitted termination of this Agreement, Buyer 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 Buyer's Transponders to other customers, it shall permit Buyer to recommence the operation of this Agreement, upon payment of such amounts, the next monthly payment due, and late payment charges. 7.6 Rights and Obligations Upon Termination. Each sale is made based upon an anticipated Satellite life [************] above. It is understood, however, that a variety of factors including the final weight of the Satellite when completed by the manufacturer, the quality of the launch and failure of on-board equipment may result in a shorter (or longer) life. As compensation for any shortened life, upon termination of this Agreement in accordance with any of Sections 7.3, or 7.4 above, or Sections 7.7, 7.8, 7.9 or 8.1 below, as PanAmSat's sole warranty obligation to Buyer, other than as expressly provided in Section 5.2 above, Buyer's obligation to make Installment payments for the terminated Buyer's Transponder(s) that have not already become due under the Agreement shall cease and, in lieu of a Warranty Credit under Section 5.2, PanAmSat shall promptly refund to Buyer any portion of the previous month's Installment pro rata for the portion of the month after which the applicable Buyer's Transponder(s) ceased to made available to Buyer following a failure of a Buyer's Transponder(s) on a Confirmed Basis. PanAmSat shall be entitled to retain all other Installments paid and shall be entitled to any Installments due prior to the effective date of termination; in all cases, with all specified interest as of the time of termination notwithstanding the early termination of the Agreement as to one or more Transponders. The termination of this Agreement for any reason in accordance with this Agreement shall extinguish all of PanAmSat's obligations to sell and convey title to the affected Buyer's Transponder(s), and Buyer's obligations to purchase, the affected Buyer's Transponder(s), 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. If title to the Buyer's Transponders has already been conveyed under this Agreement, then upon the termination of this Agreement, as to the affected Buyer's Transponders, Buyer shall reconvey title back to PanAmSat free and clear of liens, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 51 claims, and encumbrances, except if created by action or failure to act of PanAmSat. In confirmation thereof, Buyer shall execute such document of conveyance as PanAmSat may reasonably request to confirm that such reconveyance has occurred. For the avoidance of doubt, following termination of this Agreement, PanAmSat shall [******************** *****************] what had been the Buyer's Transponders, without limitation, for the provision [*******************************************]. 7.7 Termination for Patent Infringement. In the event that: (a) PanAmSat's provision of the Buyer's Transponders infringes upon the patents or intellectual property rights of third parties; (b) such infringement exists independent of the combination of the Buyer's Transponders with any Buyer-Provided Facilities; and (c) as a result, Buyer cannot use the Buyer's Transponders without infringing upon the patent or intellectual property rights of third parties, Buyer may terminate this Agreement as to the affected Satellite 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 Buyer is not protected under the indemnity provided by PanAmSat's Satellite manufacturer) to indemnify and hold harmless Buyer from any claim or suit based on such infringement and arising from PanAmSat's continued provision and Buyer's continued use of the Buyer's Transponders on and after the date that PanAmSat agrees to so indemnify Buyer. In this latter instance, Buyer 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 Satellite manufacturer's indemnify, in accordance with the relevant provisions of PanAmSat's contract with the Satellite manufacturer. 7.8 Cross Termination by Buyer. Upon the termination of this Agreement with respect to the entire Primary Satellite under any of Sections 7.3, 7.4, 7.7, 7.9, or 8.1, Buyer shall have the [***] to terminate this Agreement as to the PAS-3 Satellite effective immediately on notice to PanAmSat. Such notice must be given, if at all, at the same time that Buyer notifies PanAmSat of its termination of the Agreement as to the Primary Satellite, or, if termination of the Agreement as to the Primary Satellite occurs under the listed sections on PanAmSat's notice to Buyer, within ten (10) days of that notice. For the avoidance of doubt, other than under Section 7.5 (Termination by PanAmSat of Cause), the termination of this Agreement with respect to PAS-3 or, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 52 provided that the Minimum Complement is maintained, the partial termination of this Agreement as to individual Transponders on the Primary Satellite, shall not result in a termination of this Agreement as to other Transponders, nor (except as provided in Section 7.5 above) shall the termination of this Agreement as to one of PAS-6 or PAS-6B result in the termination of this Agreement as to the other one. 7.9 Early Termination Right. In recognition of the additional risks to maintaining satellite operations beyond the specified design life of the Satellite, Buyer shall have the right, subject to the conditions specified in this Section 7.9, to terminate this Agreement [************************ *********************************] after the PAS-6 Delivery Date. Exercise of such termination rights by Buyer must occur, if at all, on or before the earlier of: (a) the [************************] of the PAS-6 Delivery Date; or (b) [*******************] PanAmSat notifies Buyer 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 Buyer exercises its termination right under this Section 7.9, but in no event shall such exercise decision be required earlier than [*********************************] PAS-6 Delivery Date. For the avoidance of doubt, such rights do not apply to PAS-6B, where (subject to Buyer's warranty rights under Section 7.6) the risks of such operation beyond [******] have been addressed differently in this Agreement. ARTICLE 8. FORCE MAJEURE. 8.1 Failure To Deliver Or To Perform. Any failure or delay in the performance by PanAmSat of its obligation to Deliver the Buyer's Transponders or to continue to make them available to Buyer 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 Buyer 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 53 Agreement, as to the affected Buyer's Transponder(s), if, because of force majeure conditions: (a) after the applicable Delivery Date for the Satellite, PanAmSat does not make available the Buyer's Transponders meeting the Performance 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 available the Buyer's Transponders meeting the Performance Specifications will not be able to recommence within this sixty (60) day period. The foregoing notwithstanding, Buyer's rights to terminate under Sections 7.1, 7.1A, and 7.2, and, to the extent a failure to provide the Buyer's Transponders results from a malfunction of a Satellite, under Section 7.3, shall be governed by those Sections. Buyer shall not be permitted to terminate this Agreement if PanAmSat's inability to perform is due to acts or omissions of Buyer 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 Sections 7.1, 7.1A, 7.2, or 7.3 and that are not due to events described in the previous sentence, if a Buyer's Transponder is not made available by PanAmSat in accordance with the Performance Specifications due to a force majeure condition, provided that if Buyer ceases use of the affected Buyer's Transponders during such period (except in coordination with PanAmSat to determine if the Buyer's Transponders can be restored to the Performance Specifications), Buyer shall be entitled to Warranty Credits for the affected Buyer's Transponders, as calculated under Section 5.2 hereof, to reflect the period during which the Buyer's Transponder(s) were 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 EXPRESSLYEXCLUDED AND DISCLAIMED. IT IS EXPRESSLY AGREED THAT PANAMSAT's SOLE OBLIGATION AND BUYER'S EXCLUSIVE REMEDIES FOR ANY CAUSE WHATSOEVER ARISING OUT OF OR RELATING TO THIS AGREEMENT ARE LIMITED TO THOSE SET FORTH IN SECTIONS 3.1(c), 5.2, 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 54 damages or loss of revenues, whether foreseeable or not, occasioned by any defect in the Satellite(s), the Transponders or the provision of the Buyer's Transponders to Buyer, any delay in the Delivery of the Buyer's Transponders to Buyer, any failure of PanAmSat to continue to make available the Buyer's Transponders, or any other cause whatsoever. 9.2 Limitation Of Liability Of Others. Without limiting the generality of the foregoing, Buyer 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(s) or the Buyer's Transponder(s), or the provision of the Buyer's Transponders to Buyer 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 of this Agreement and subject to PanAmSat's right as a third party beneficiary under Section 1.4(b), 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 Buyer, except with respect to any partner or agent to the extent arising out of the transmission of signals to the Satellite(s) by it or on its behalf. 9.3 Indemnification. Buyer 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 the Buyer's Transponders to Buyer from, or Buyer's use of, the Satellite or the Buyer's Transponder(s), that (a) is caused by the fault or negligence of Buyer, (b) arises under a warranty, representation, or statement by Buyer to any third party in connection with transmissions carried on the Buyer's Transponders, (c) arises out of the content of Buyer's 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 Buyer 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. 55 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 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 Buyer's Transponders and such indemnification obligations may be passed through to protect PanAmSat's customers, PanAmSat shall pass such protection through to Buyer; 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 Buyer is obligated to provide indemnification pursuant to this Article 9 or Section 3.5(a) or PanAmSat undertakes to indemnify Buyer under Section 7.7 or is obligated to provide indemnification pursuant to Section 3.5(b), 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 except with respect to Buyer Indemnified Taxes imposed by way of withholding at its source (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 (provided, however, that with respect to Buyer Indemnified Taxes imposed by way of withholding at the source, Indemnitor shall have acknowledged in writing its 56 obligation to pay Additional Amounts, with respect thereto to Indemnitee prior to such settlement, compromise or consent) (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 obligation which would otherwise then or thereafter have existed or arisen in respect of such claim. 9.7 Limitation of Liability [**************************************]. Buyer's money damages exposure to PanAmSat with respect to any breach of obligations under Section [**************************************************** ****************************************************************************** ***************************] 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 Collateral Trustee. With respect to PAS-3: (a) Buyer hereby acknowledges that this Agreement and all rights granted to Buyer hereunder are subject and subordinate to a security interest and lien in favor of First Trust National Association (the "Trustee"), as the same may be assigned (the "Security Interest") in and to the Transponder(s) that may be owned and operated by PanAmSat and which are the subject of this Agreement (and/or the proceeds from the sale or other disposition of all or any portion thereof, or any insurance that may be received by PanAmSat as a result of any loss or destruction of, or damage to, the Transponders identified above). The Security Interest shall be deemed to arise under all security agreements, indentures, mortgages, pledge agreements and other collateral documents between Trustee and PanAmSat, including all renewals, modifications, consolidations or replacements thereto (collectively, the "Collateral Documents"). Notwithstanding the Security Interest, the Trustee agrees that Buyer shall continue to have the benefits of this Agreement notwithstanding any default on [***] Filed separately with the Commission pursuant to a request for confidential treatment. 57 the part of PanAmSat under the Collateral Documents, so long as (i) Buyer is not in default under the terms and conditions of this Agreement, (ii) Buyer shall not pay any of its obligations under this Agreement more than 30 days prior to their scheduled payment date under this Agreement, (iii) this Agreement is not supplemented, amended or extended or otherwise modified in any manner which adversely affects the interests of the Trustee on behalf of the holders of the Senior Secured Notes (as defined in the Collateral Documents) in a degree greater than the manner in which it adversely affects PanAmSat, and (iv) after receipt of notice from the Trustee of a default by PanAmSat under the Collateral Documents, Buyer agrees to make, and makes, all payments thereafter as instructed by the Trustee. (b) Buyer acknowledges and consents to the foreclosure, should it occur, upon this Agreement by the Trustee or its designee, successor or assignee, and the consequent replacement of PanAmSat under this Agreement by the Trustee, its designee, successor or assignee, or another purchaser or assignee, provided that any successor to PanAmSat under this Agreement (i) expressly assumes PanAmSat's obligations hereunder for the benefit of Buyer, and (ii) succeeds to substantially all of the right, title, and interest in and to all assets of PanAmSat reasonably necessary for such successor to perform its obligations under this Agreement. Upon such succession and assumption by a party other than the Trustee, the Trustee and its successors under this Agreement, other than the ultimate successor, shall be released from any further liability under this Agreement. (c) The Trustee shall be entitled to exercise all rights and to cure any defaults of PanAmSat under this Agreement, within such cure period as may be available to PanAmSat under this Agreement. Upon receipt of notice from the Trustee, Buyer agrees to accept such exercise and cure by the Trustee and to render all or any part of the performance due by Buyer under this Agreement to the Trustee. (d) Provided that Buyer performs its payment and other obligations under this Agreement, after payment in full of the Purchase Price for the Buyer's Transponders, Trustee shall release its lien upon the Buyer's Transponders. (e) The Trustee shall be deemed an express third party beneficiary of this Section 10.2. This Section 10.2 shall be self-operative and no further instrument of subordination shall be required by any security agreement, mortgage or other 58 document reflecting the Security Interest to make this subordination effective. In confirmation of such acknowledged subordination, Buyer shall execute promptly any instrument or certificate which PanAmSat or the Trustee may reasonably request. 10.3 Subordination to Other Entities. Buyer acknowledges and agrees that PanAmSat may grant additional security interests in the Transponders and/or the Satellite to other parties. In such event, provisions that are the same as in Section 10.2 above or, to the extent that changes are requested by another secured party, similar provision shall apply. 10.4 PanAmSat's Right To Assign. Buyer agrees that PanAmSat may assign its rights and interests under this Agreement and to the Satellite(s) 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. Buyer agrees that upon receipt of notice from PanAmSat of such assignment, Buyer 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, Buyer 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. 10.5 Buyer Assignment. Buyer may assign its rights under this Agreement and/or to the Buyer's Transponders only in whole, only to an Approved Participating Company (or any entity Controlled by an Approved Participating Company), and only if the following conditions are satisfied: (a) the proposed assignee in writing assumes all of Buyer's obligations with respect to this Agreement and agrees to be treated as Buyer 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) Buyer 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 Buyer; (ii) the assignee is one of the Approved Participating Companies as to whom (as shown in Appendix I) PanAmSat has consented to its current programming practices and said assignee agrees to follow the assignor's current programming practices (as 59 exist as of the date of this Agreement) with respect to the use of Buyer's 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. Buyer may also assign its rights under the Agreement in a sale lease back transaction with a bona fide financial institution, but only if such a sale lease back transaction is transparent to PanAmSat; i.e., among other things, Buyer must remain in operational control with full rights of beneficial use of the Buyer's Transponders; all obligations of the Agreement of Buyer and the Buyer Companies shall remain as if the sale lease back agreement does not exist, and in no event, including (without limitation) any default by Buyer under the underlying sale lease back agreement(s), shall operational control or beneficial use of the Buyer's Transponders be removed from Buyer's control. Without limitation, any assignee shall be required to use the Transponders assigned in accordance with Section 1.4. The foregoing notwithstanding, following the date that is fifteen (15) years after the Delivery Date of the applicable Satellite, the condition that the assignment be made only to an Approved Participating Company shall no longer be required to be met; provided that any such assignment to a non-Approved Participating Company vis-a-vis the Primary Satellite shall, unless already exercised, extinguish the successor and collocated satellite rights stated in this Agreement it being understood, without limitation, that such successor and collocated satellite rights are not assignable to a non-Approved Participating Company without PanAmSat's express written consent. 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. 60 10.7 No Resale. Except as expressly permitted in Sections 1.4, 1.6, and 10.5, the Buyer's Transponders are being provided for Buyer's own use and in no event shall Buyer be permitted to resell them, in whole or in part, to any other person or entity. ARTICLE 11. CONFIDENTIALITY 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 the 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) to Globo, News, Televisa, TINTA, 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 (for PAS-3 and PAS-6) or will use all reasonable efforts to obtain by the PAS-6B Delivery Date (for PAS-6B) and will use all reasonable efforts to maintain all consents and authorizations from the FCC and other governmental entities that may be necessary to Deliver the Buyer's Transponders 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-3, PAS-6, and PAS- 61 6B. 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 subsequently filed with the FCC or other applicable governmental entity, PanAmSat and Buyer 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. 62 ARTICLE 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF PANAMSAT. 13.1 Orbital Location. PanAmSat has been authorized to construct, launch, and operate PAS-3 and PAS-6 in geostationary orbit at 43(degree) West Longitude ("W.L."). PanAmSat will promptly apply to the FCC for authority to launch and operate PAS-6B in geostationary orbit at 43(degree) W.L. As long as Buyer has rights hereunder to use the applicable Satellite, PanAmSat shall use such orbital location (or, to the extent that PanAmSat obtains FCC authority to do so, any location(s) within five degrees of 43(degree) W.L.), 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(s), from which Buyer has rights to use hereunder, from outside the orbital range specified above. In the event that PanAmSat is required to change a 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 Buyer with Transponders that meet the Performance 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 a Satellite outside of the orbital range from 38(degree) W.L. through and including 48(degree) W.L. shall, for purposes of Section 7.3, constitute a failure of the Transponders on that Satellite to meet their Performance 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(s) and to comply in all material respects with all FCC and other governmental regulations regarding the operation of the Satellite(s); 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-3, PAS-6, and PAS-6B. 13.3 Operational Reports. PanAmSat shall provide Buyer a quarterly written operational report concerning the Satellite(s) which shall include information regarding the status of Spare Equipment and updated projections regarding the predicted life of the Satellite(s). PanAmSat shall also notify Buyer as soon as practicable of any significant anomalies with respect to the Satellite which have a material effect on the Buyer's Transponder(s) or materially reduce the projected life of a Satellite. 63 ARTICLE 14. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS. 14.1 Progress Reports. Beginning not later than ninety (90) days after the date of execution of this Agreement and continuing until PAS-6B Delivery, PanAmSat shall furnish to the Buyer on a monthly basis a written progress report that shall state PanAmSat's projected scheduled launch date and projected date of Delivery for PAS-6B. PanAmSat shall notify Buyer as soon as possible of any significant change in the then-anticipated Delivery Date, including any anticipated delay beyond the Latest Anticipated Delivery Date for PAS-6B or any change in the month of anticipated delivery or of launch for PAS-6B beyond October, 1998, and of any formal notification of a delay in construction or launch of PAS-6B that PanAmSat may receive from its construction or launch contractors. PanAmSat shall keep Buyer informed periodically of written communications to PanAmSat from the FCC which materially affect PanAmSat's ability to fulfill its obligations to Buyer under this Agreement and to timely Deliver the Buyer's Transponders, and shall promptly deliver copies to Buyer of any such written communications. 14.2 Inspection Rights of Buyer. PanAmSat shall give Buyer reasonable notice of the commencement of pre-Delivery in-orbit testing for PAS-6B. Subject to the consent of PanAmSat's manufacturer, which PanAmSat shall seek to obtain and Buyer's execution of any additional proprietary data agreement that the applicable manufacturer may require, Buyer shall be given access to the test data from such tests that are relevant to the Performance Specifications of Buyer's Transponders and Buyer shall be allowed to be present during such in-orbit testing. In addition, again subject to the consent of the manufacturer and the execution of any necessary proprietary data agreement that the manufacturer may require, PanAmSat shall give Buyer access to pre-Delivery test information and reports relevant to the Buyer's Transponders, allow Buyer to inspect the work in progress at reasonable times and upon reasonable notice, and allow Buyer to be present during pre-Delivery testing for which PanAmSat also has access. It is understood, in this regard, that the implementation of this paragraph is intended to be implemented at a cooperative level largely between the respective engineers of the parties and that formal notice of events or information will not be required. 64 This Section 14.2 does not apply to PAS-3 and has already been implemented for PAS-6. 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 Buyer 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 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 Buyer and PanAmSat, and, except as provided under Sections 10.2, 10.3 and 17.1, no third party may seek to enforce or benefit from these provisions, except 65 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 Buyer 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, with respect to PAS-3 are intended for the benefit of both PanAmSat and all other Protected Parties on PAS-3, except that no Protected Party who has the right to uplink to a Satellite shall be entitled to third party beneficiary rights to enforce Section 4.1 against Buyer, unless the agreement giving such other Protected Party the right to uplink to a Satellite also gives Buyer 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 Buyer directly, in an action brought solely by itself, or (b) to join with PanAmSat or any other Protected Parties in bringing an action against Buyer 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. 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, Buyer shall maintain at each earth station transmitting signals to the Satellite(s) a telephone that is continuously staffed at all times during which customer is transmitting signals to the Satellite(s) 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 66 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 Greenwich, Connecticut 06830 business: Attention: General Counsel To PanAmSat if by facsimile: 203-622-9163 Attention: General Counsel 67 With a copy to: If by recognized courier service or Goldberg, Godles, Wiener & Wright by personal delivery to its principal 1229 Nineteenth Street, N.W. place of business: Washington, D.C. 20036 Attention: Henry Goldberg If by facsimile: 202-429-4912 Attention: Henry Goldberg To Buyer if by recognized courier NetSat Servicos Ltda. service or by personal delivery to its Av. Paulista, 1106 5 Andar principal place of Cerqueira Cesar CEP 01310-100 business: Sao Paulo SP Brazil Attention: General Manager To Buyer if by facsimile: With a copy to: If by recognized courier service or by The News Corporation Limited personal delivery to its principal 1211 Avenue of the Americas place of business: New York, New York 10036 Attention: Group General Counsel If by facsimile: 212-852-7147 68 and The News Corporation/Sky Latin America 10201 West Pico Boulevard Los Angeles, California 90035 If by facsimile: 310-369-3742 Attention: Executive Vice President, Business Affairs and If by facsimile: 310-369-3595 Attention: Executive Vice President, Legal Affairs and Globo Comunicacoes e Participacoes Ltda. A.V. Afranio De Mello Franco 135 - 1 Andar Rio de Janeiro - RJ - Brasil CEP 22 430-060 Attention: Ronaldo Mascarenhas If by facsimile: 011-55-21-529-7695 and Debevoise & Plimpton 875 Third Avenue New York, New York 10022 Attention: Michael J. Gillespie If by facsimile: 212-909-6836 69 and Tele-Communications International, Inc. 5619 DTC Parkway Englewood, Colorado 80111 If by facsimile: 303-267-5651 Attention: President and If by facsimile: 303-488-3207 Attention: General Counsel 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 Buyer notifies PanAmSat that a Transponder does not meet the Performance Specifications and/or that PanAmSat notifies Buyer that a Transponder has been restored to its Performance 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. 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. 70 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 Buyer's Transponders that are [********] to or [********] from the Buyer's Transponders on PAS-6 ("Brazil Ku-Band Transponders"), PanAmSat shall give Buyer the right to [***] or enter into a [******************] with respect to, at Buyer's election, some or all (but in no event less than the lesser of (i) [***] and (ii) an amount equal to [***] of the [***] Ku-band [***] on such satellite, a [*************] of the Brazil 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[********] in relevant part, to this Agreement, [***] as appropriate to reflect [***] 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 Brazil Ku-band Transponders subject to negotiation and Buyer and the Buyer Companies with respect to transponder capacity to be used for the provision of DTH Service to Brazil). (ii) During the [*************] negotiation period, PanAmSat agrees to [***] Buyer a [******************] for a [********] on the applicable satellite that shall, subject to the qualifications stated below, [********] a [*************] paid in equal monthly installments over [*********************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 71 **************************************************************************** ****************************************] per month per Transponder increased for [***] by a [***] equal to the increase in the [***] (as defined below) from the Delivery Date of the PAS-6 Buyer's Transponders to the month and year of the Delivery 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 Delivery 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 [********] 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 purchase price 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 the costs of the[********] including increases in [********] or the need to purchase[********] 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-6 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 Buyer of, or publicly announces, a [********] to launch a Collocated or Successor Satellite; and (b) [********] prior to the proposed launch of the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 72 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 Buyer has given PanAmSat a "Buyer'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, Buyer shall have the right to make to PanAmSat Buyer's [************] ("Buyer'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 Brazil Ku-band Transponders on the applicable Collocated or Successor Satellite. (vi) If Buyer makes the Buyer's Offer, for as long as it is held open (i.e., that it may be accepted by PanAmSat without Buyer's subsequent right to withdraw it), until [******] after the launch of the Collocated or Successor Satellite, PanAmSat will not, without [***] offering the Buyer the [***] to do so, and for a period of [************] following notice of such offer to Buyer, enter into a [***] or [******************] for the [******************] Brazil Ku-band Transponders on the same Satellite than stated in Buyer's Offer that, overall, taking into account the price (which, for purposes of comparison, will be calculated on a [************************* ***********] by PanAmSat, but notified to Buyer so that Buyer may make an [***] in its offer to reflect this [*************] and [***] terms and conditions (but not [********] individual terms and conditions) are, [*******************] to PanAmSat than, Buyer's Offer. (b) Related Collocated Satellite Rights. PanAmSat shall notify Buyer 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 Buyer's rights under this Article 16 apply, if the [***] of the [***] would [***] the [***] of the [****************] on the Collocated Satellite for the provision of Transponder Capacity to Buyer for use in Brazil on a future Collocated [***] Filed separately with the Commission pursuant to a request for confidential treatment. 73 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 Buyer's Transponders so as to [***] their meeting their [***] Specifications.) Before committing to such a Collocated Satellite that would [***] the use of such [**********************] by Buyer in Brazil, other than pursuant to an obligation under the[*************] PanAmSat shall give Buyer 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 Brazil, Buyer shall have until the later of: (i) [******] from PanAmSat's notice to Buyer, or (ii) until the [****************] specified below, to exercise such rights. Buyer shall not be required to make any decision regarding [***********************************************] either under this clause (b) or clause (a) above [****************************] as to any [********] that is [******************************] unless in either case PanAmSat is required by [*************] to proceed with the [***] of a [*************] under the [*************] (the "Decision Period"). In addition, PanAmSat will not require Buyer to make a decision whether [************* *************************************************] (and the "Decision Period" will be so extended), unless either (i) PanAmSat was [***********] by[*************], as provided above, or (ii) PanAmSat [************] to [***********************] that it acquires on a Collocated Satellite to any third party for any lawful purpose, subject to Buyer'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, unless PanAmSat was [*********************************************************************** ***********************] if PanAmSat notifies Buyer in [**************] of PanAmSat's [******************] a [*********] either with [*************** *********] or [***************] Transponders that would have a [************* *****************************] to have Brazil Ku-band Transponders, Buyer [*******************] whether to [******] an agreement to [*********] on such Satellite or [********* [***] Filed separately with the Commission pursuant to a request for confidential treatment. 74 *********] of a Satellite employing such frequencies for [***************] Transponders until [************] such [*************] could not be placed into [***************************] unless Buyer's right to so decide is extended until [************] and, unless PanAmSat allows Buyer the right specified above to [****************] Buyer will have until [***************] to make a decision, effectively [***] PanAmSat from committing to any [*************] of such [*******************]. The foregoing notwithstanding, if Buyer requests PanAmSat to provide [******************] under Section 1.7(b)(ii)(B) above, Buyer 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 1.7(b)(ii)(B) shall not be deemed to give rise to rights under this or related provisions. (c) PanAmSat Obligated to Launch. Buyer 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 [*****************************************] and, if Buyer agrees to [******] on a [**********************************] of the Delivery Date of [******************************************************] each with at least [***] "Brazil Ku-band Transponders," meeting the criteria set forth in clause (a) above; (ii) Buyer shall use all reasonable efforts to [******] exercise of rights under this Section 16.1 with the [************** **********] by [*******************] under the [***************] 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) Buyer must [*************] or enter into [******] of [************] for at [*************] Ku-band transponders on each satellite that PanAmSat is required to cause to be [*************************] provided that [***] Filed separately with the Commission pursuant to a request for confidential treatment. 75 PanAmSat may [***] Buyer to [************] Ku-band transponders if Buyer is otherwise unwilling to do so, but only if PanAmSat grants Buyer the right to assign to any third party for any lawful purpose the number above [******] ("Extra Transponders") that Buyer is required to take (subject to Buyer's ultimate obligations as under Section 10.6) and PanAmSat agrees to use reasonable efforts to assist Buyer in assigning its rights to such capacity; (iv) Except under circumstances in which Buyer 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 [*******] Buyer'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 Buyer 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 Buyer's [***] at least as great as it has used or uses during the [***] period for other capacity. If permitted by law, PanAmSat will go forward in advance of such resolution if Buyer [***] for and [***] the [******] (e.g., [***] and[*************]) of proceeding along such a course); (vi) PanAmSat may [***] Buyer 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 Buyer requires PanAmSat to proceed with the construction, launch and operation of a Successor or Collocated Satellite, the purchase [***] Filed separately with the Commission pursuant to a request for confidential treatment. 76 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 Buyer 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, as applicable: (A) a Successor Satellite for PAS-6 can be scheduled to be available (subject to the conditions stated herein, at Buyer's election) either [*************************************** **********************] of PAS-6 (an "Early Successor Satellite") or, provided that the termination right specified in [***] above is not exercised and provided that Multi-Country Platform has not agreed to acquire capacity on an "Early Successor Satellite," by such time that the underlying satellite is to be taken out of service in accordance with [***] above, and (B) a Successor Satellite for PAS-6B can be scheduled to be available no earlier than the [************************] and no later than the date that the Satellite would otherwise be scheduled to be taken out of service under [***] (it being understood that PanAmSat may in its discretion, also elect itself to proceed with a Successor Satellite scheduled to be available at any time during this period), and (C) 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 (or by such other period as the parties may negotiate in connection with any underlying agreement for the provision of capacity from such a Collocated Satellite). (d) Consultation. PanAmSat will consult on the planning and design of Successor and Collocated Satellites (including, without limitation, the Ku-band transponders, [***] etc.) intended for [***************************] it being understood that [*****************] (e.g., [***********] that [******] may be [*****] to Buyer at [*****] and beyond the [******] stated in clause 16.1(a)(ii) above, if applicable. (e) Condition of [***************]. Buyer shall cease to have any rights under this Article 16 if there is any [********************* *********] unless a [****** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 77 ***********] of Buyer remains with the [************ *****] which shall include[***] who, as of the Execution Date, held a majority of the voting equity of the Buyer. Buyer shall [************] under clause (c) above if Buyer [***] to have any obligations under Section 1.7(a)(ii). If Buyer [***] to have [***] under Section 1.7(a)(ii) other than by pursuant to clause 1.7(b)(iii), Buyer 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 Buyer at that time. (f) Survival. The termination of this Agreement under Section 7.4 or, if the number of Buyer's Transponders (on the Primary Satellite and, if applicable, PAS-3 Transponders that are retained by Buyer under Section 1.2) that meet their Performance 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 Buyer for [***] or [************] a Collocated or Successor Satellite (including, without limitation, an "Early Successor Satellite"). If Buyer 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 Buyer'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 the Primary Satellite (or, if Buyer makes a [**************] of [***] on a [*******************] to [***] such [**************] at its presently assigned location or at such [*******************] to which the FCC may authorize the Primary Satellite to be moved, or, to the extent that this Section 16.1 survives the termination of this Agreement under clause (e) above, the [*********] of the Primary Satellite from which Buyer [*************] provided under this Agreement. For purposes of this Section 16.1, the term "Collocated Satellite" shall mean any [***] Satellite (i.e., [***] one that has [******] launched as of the date of this Agreement), other than successor satellite(s) to previously launched satellites, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 78 containing Ku-band capacity that PanAmSat launches or causes to be launched to be in the [*********] as the Primary Satellite while the Primary Satellite is still in[***************] or, to the extent that this Section 16.1 survives the termination of this Agreement under clause (f) above, the [************] of the Primary Satellite from which Buyer [***] the [***] provided under this Agreement. PAS-6B shall not be deemed to be a Successor Satellite or a Collocated Satellite to PAS-6. (h) [******************************]. This Section 16.1 does [******] to [***] or its successor satellite(s) or, unless there is no PAS-6B Delivery Date, [***] nor shall the termination of this Agreement solely as it relates to [************************************] have any [***] on this Section 16.1. Except as provided in clause (f) above, this Section 16.1 shall [***] to apply at such time that this Agreement is [*******************************]. Neither PanAmSat nor Buyer shall be required to make any decision or take any action under this Section 16.1 until after the end of the Interim Period. ARTICLE 17. PARTICIPANT 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 Globo, News and TINTA (the "Current 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 [******************************************] Buyer 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 Buyer 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 L. 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. 79 ARTICLE 18. [***********] RIGHTS. 18.1 [******************]. PanAmSat has entered into an agreement with [****** *********************************************************************] at a price of [***************] to secure [***************] for a [*************] Satellite (to have [********************] configuration and performance as [*****] which Hughes would then agree (subject to provisions regarding unanticipated delays) to make available in time for [***] within [***] of ordered completion, but not earlier than [********] provided that the order for completion may not be made later than [***************************] after the [************]. Buyer [************************] are evaluating whether to commit to a [***] in the event of a [************************]. Not later than[*********] Buyer [****************** *********] shall notify PanAmSat whether they desire to pursue a [***********] in accordance with the first paragraph of this Section 18.1. In such event, the parties shall negotiate in good faith to reach an amendment to this Agreement to provide for such a [**************************************] such negotiations to be concluded, and an amendment executed (if at all) no later than [*********]. It being understood and agreed that certain material terms will have to be negotiated at the time, certain basic parameters of the contemplated [***] amendment, if entered, are as follows: (1) Buyer [************************] would both commit to take [*************] transponder capacity from [***************** *******************************] and would be required to exercise any available [******] as to [**********************************]. (2) Buyer [************************] would continue to be obligated to take capacity from PAS-6 (and, if applicable, PAS-3) [**********************] and in the event that [******************************** *******************************] or if the [***] program is otherwise terminated (e.g., for delay -- the conditions of such termination to be negotiated), the Agreement as to PAS-6 (and, if applicable, PAS-3) [***]. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 80 (3) Upon the execution of the [***] Amendment, PanAmSat shall order the [*********] from[***], subject to item (4), at[*********]. If [*************************], PanAmSat would then order [***] to be completed and launched, again subject to item (4), at [*********]. (4) Once this Agreement is amended as to[***] if Buyer terminates this Agreement as to PAS-6B [***] Buyer [**************** *******************] shall be[*********************************************** ****************] subject to any available [***] from[***]. Further, if PanAmSat orders [***] to complete PAS-6C [*******************] any pre-launch termination by Buyer [*************************] of PAS-6C (under conditions to be negotiated) shall be subject to their [***********************] of its [*********************************************************]. It is understood and agreed that if the parties are unable to reach agreement on a [***] Amendment, this Agreement shall continue in full force and effect. Further, in no circumstances will PanAmSat be required to commit to [************************************] if Buyer and [*********** **********] are not also so committed. Without limiting the above, it is understood that PanAmSat is also exploring other potential [***] satellite [********] in this event. If presented by PanAmSat, Buyer agrees in good faith to consider such alternate proposal(s). 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 Amounts 3.5(a) Additional Facilities Costs 1.6(b) Affiliate 1.4(b) Agreement Preamble Amortization Schedule 3.1(b) Approved Companies 1.4(b) Approved Participating Companies 1.4(b) Availability Date 1.1A [***] Filed separately with the Commission pursuant to a request for confidential treatment. 81 Beam Preamble Brazil Ku-band Transponders 16.1(a)(i) [******] 16.1(a)(i) Buyer Company 1.4(c) Buyer Preamble Buyer's DTH Service 1.4(b) Buyer Indemnified Taxes 3.5(a) Buyer's Offer 16.1(a)(v) Buyer-Provided Facilities 4.2 Buyer's Transponders Preamble [******] 16.1(a)(ii) Catastrophic Failure 7.1B(i) Collateral Documents 10.2(a) [******] 16.1(g) Confidentiality 7.6 Confirmed Basis 5.3 Confirmed Outage 5.1 Control 1.4(b) [******] 16.1(a)(ii) Current Guarantors 17.1 Decision Period 16.1(b) Delivery 2.1 Delivery Date 2.1 Deposit 3.1(a) DTH Service 1.4(a) and 1.7(h) Dual Illumination Period 1.2 and 5.4(c) [******] 16.1(c)(viii) Excess Amount 1.6(b) Execution Date Preamble Extra Transponders 16.1(c)(iii) [******] 1.3A [******] Transponders Preamble Founding Partner in Competition 1.7(d) Founding Partners 1.4(b) Globo Preamble Home Page Transponder 1.2 Hughes Preamble Hughes Force Majeure 7.1B(ii) Indemnitee 9.6 Indemnitor 9.6 Installment 3.1(b) Interim Period 1.6 Ku-band 1.4(a) Latest Anticipated Delivery Date 2.1 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 82 Launch Failure 7.1 Letter Agreement Preamble [******] 18.1 Loral Preamble Minimum Complement 2.1 [******] 3.1(c)(i) Multi-Country Agreement Preamble and 5.3 Multi-Country Platform Preamble Negotiation Period 16.1(f) News Preamble Non-DTH Outlets 1.4(b) Operational Requirements 4.1 Other Satellite 5.4B PanAmSat Company 1.7(a)(i) PanAmSat Country 3.5(b) PanAmSat Group 9.3 PanAmSat Preamble PAS-3 Preamble [******] 1.2 PAS-3 Transponders Preamble PAS-6 Preamble PAS-6B Preamble PAS-6 Transponders Preamble PAS-6B Transponders Preamble Payment Force Majeure 7.5A Performance Specifications 2.1 Primary Satellite Preamble [******] 1.7(a)(i)(A) Protected Parties 5.3 Purchase Price 3.1 [******] 3.1(c)(iii)(A) Satellite Preamble Security Interest 10.2(a) simultaneous 5.3 Spare Equipment 5.3 Substitute Capacity 5.3 [******] 16.1(g) Taxes 3.5(a) Telephone Notices 4.3 Televisa Preamble Term 2.1 Termination Payment(s) 7.5 Time for Early Replacement 7.4(f) TINTA 1.4(b) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 83 Transaction Costs 1.6(b) Transponder Preamble Transponder Service Agreement Preamble Trustee 10.2(a) TT&C Maintenance Fee 3.2 TWTAs 5.3 Warranty Credit 5.2 Warranty Period 5.2 W.L. 13.1 Defined terms include plural or singular versions and derivatives therefrom (e.g., "Control," "Controlling"). 84 Each of the parties has duly executed and delivered this Agreement as of the day and year first written above. Notarized: PANAMSAT INTERNATIONAL SYSTEMS, INC. By: Name: Title: Notarized: NETSAT SERVICOS LTDA. By: Name: Title: 85 EX-10 11 EXHIBIT 10.41.2 Exhibit 10.41.2 Schedule identifying substantially identical agreements by PanAmSat Corporation ("PanAmSat") in favor of each of the following persons, to the form of Indemnity Agreement constituting Exhibit 10.41 to PanAmSat International Systems, Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 1996. - -------------------------------------------------------------------------------- Name ---- Charles H. Noski Frederick A. Landman Patrick J. Costello Steven D. Dorfman John J. Higgins Ted G. Westerman Dennis F. Hightower James M. Hoak Joseph R. Wright, Jr. Michael T. Smith Lourdes Saralegui Carl A. Brown Kenneth N. Heintz Robert a. Bednarek James W. Cuminale David P. Berman Roxanne S. Austin EX-10 12 EXHIBIT 10.45.1 Exhibit 10.45.1 March 6, 1998 Mr. Frederick A. Landman President and Chief Executive Officer PanAmSat Corporation One Pickwick Plaza Greenwich, Connecticut 06820 Re: Modification of Employment Agreement Dear Fred: Reference is made to that certain Employment Agreement, dated May 15, 1997 (the "Agreement"), between you and PanAmSat Corporation (then known as Magellan International, Inc.). This letter will confirm our mutual agreement to the following amendment in the third line of paragraph 7(d) on page 8: delete the words "during the first year following the Effective Date," substitute in lieu thereof the words "on or before November 15, 1998," Except as amended hereby, the Agreement remains in full force and effect. If the foregoing is acceptable to you, please indicate your agreement to this amendment by signing it and returning the enclosed copy of this letter. Sincerely, PanAmSat Corporation By__________________ Michael T. Smith Chairman of the Board AGREED TO: __________________________ Frederick A. Landman EX-10 13 EXHIBIT 10.51 Exhibit 10.51 FIXED PRICE CONTRACT BETWEEN PANAMSAT INTERNATIONAL SYSTEMS, INC. AND HUGHES SPACE & COMMUNICATIONS COMPANY FOR PAS 6B HS601HP SPACECRAFT, RELATED SERVICES AND DOCUMENTATION CONTRACT No. 98-PAS-001 TABLE OF CONTENTS PAGE ARTICLE 1. EXHIBITS AND INCORPORATIONS.................................3 ARTICLE 2. ORDER OF PRECEDENCE.........................................4 ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES..............5 ARTICLE 4. DELIVERABLES AND SCHEDULE...................................8 ARTICLE 5. PRICE......................................................10 ARTICLE 6. PAYMENTS...................................................13 ARTICLE 7. SPACECRAFT LAUNCH DATE.....................................32 ARTICLE 8. BUYER-FURNISHED ITEMS......................................34 ARTICLE 9. INSPECTION AND ACCEPTANCE..................................37 ARTICLE 10. ACCESS TO WORK IN PROCESS..................................39 ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY...........40 ARTICLE 12. EXCUSABLE DELAYS...........................................43 ARTICLE 13. AMENDMENTS.................................................46 ARTICLE 14. TERMINATION FOR CONVENIENCE................................47 ARTICLE 15. TITLE AND RISK OF LOSS.....................................51 ARTICLE 16. SPACECRAFT WARRANTY........................................55 ARTICLE 17. INDEMNIFICATION............................................57 ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE..............................................59 ARTICLE 19. PATENT/COPYRIGHT INDEMNITY.................................61 ARTICLE 20. RIGHTS IN INVENTIONS.......................................63 ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS...............................66 ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE.........67 ARTICLE 23. PUBLIC RELEASE OF INFORMATION..............................70 ARTICLE 24. TAXES......................................................71 ARTICLE 25. GOVERNING LAW..............................................72 ARTICLE 26. TITLES.....................................................73 ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES.....................74 ARTICLE 28. INTEGRATION................................................76 ARTICLE 29. CHANGES....................................................77 ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES............................83 ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY............................84 ARTICLE 32. SPACECRAFT STORAGE.........................................85 ARTICLE 33. DISPUTES...................................................86 ARTICLE 34. ASSIGNMENT.................................................89 ARTICLE 35. LIMITATION OF LIABILITY....................................91 ARTICLE 36. NO THIRD PARTY AGREEMENT...................................92 ARTICLE 37 LIQUIDATED DAMAGES FOR LATE SHIPMENT.......................94 ARTICLE 38 CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES..............95 ARTICLE 39 REPLACEMENT SPACECRAFT.....................................97 ARTICLE 40 INDEX OF DEFINED TERMS.....................................99 ARTICLE 41 EFFECTIVE DATE OF CONTRACT................................102 This FIXED PRICE CONTRACT (the "Contract") is entered into as of the 9th day of March, 1998, by and between PANAMSAT INTERNATIONAL SYSTEMS, INC. (herein called "Buyer"), a Delaware corporation having a place of business at One Pickwick Plaza, Greenwich, Connecticut 06830, and HUGHES SPACE AND COMMUNICATIONS COMPANY (herein called "Contractor"), a Delaware corporation having a place of business at 909 North Sepulveda Boulevard, El Segundo, California 90245. WITNESSETH: WHEREAS, PanAmSat Corporation (a Delaware corporation and the parent company of Buyer) and Contractor are party to that certain letter agreement dated December 24, 1997, as supplemented by that certain supplemental letter agreement dated February 9, 1997 (as so supplemented, the "Letter Agreement"), pursuant to which, in exchange for payment of consideration by PanAmSat Corporation, Contractor undertook to proceed with certain preliminary design, procurement and manufacturing efforts for a proposed PAS 6B spacecraft to support the launch date specified therein; WHEREAS, such proposed PAS 6B spacecraft would be built from a spacecraft already under construction by Contractor for a third party, and Contractor has reached agreement with such third party to terminate the agreement for construction and delivery of such other spacecraft; and WHEREAS, the Parties now desire to enter into this Contract for Buyer to purchase and Contractor to manufacture, deliver and perform (as applicable) the PAS 6B Spacecraft, Documentation and Related Services as provided and defined herein below; 1 NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 2 ARTICLE 1. EXHIBITS AND INCORPORATIONS The following documents are hereby incorporated and made a part of this Contract with the same force and effect as though set forth herein: 1.1 Exhibit A - PAS 6B Statement of Work - dated February 1998. 1.2 Exhibit B - PAS 6B Spacecraft Specification - dated February 1998. 1.3 Exhibit C - PAS 6B Spacecraft Integration Test Plan - dated February 1998. 1.4 Exhibit D - PAS 6B Product Assurance Plan - dated February 1998. 1.5 Exhibit E - Certain Documentation - dated February 1998. 1.6 Exhibit F - Maximum Termination Liability - dated February 1998. 1.7 Exhibit G - [****************] - dated February 1998. 1.8 Exhibit H - PAS 6C Payment Plan - dated March 1998. 1.9 Exhibit I - Sample Incentives Obligations Payment Schedule - dated March 1998. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 ARTICLE 2. ORDER OF PRECEDENCE In the event of any conflict or inconsistency among the provisions of this document and the exhibits attached and incorporated into this Contract, such conflict or inconsistency shall be resolved by giving precedence to this document, and then to the attached and incorporated exhibits in the order listed in Article 1 herein, entitled "Exhibits and Incorporations." 4 ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES ("DELIVERABLES") 3.1 Contractor shall sell and provide, and Buyer shall purchase, the items and services referred to in Section 4.1. Contractor shall provide the necessary personnel, material, services and facilities to design, fabricate, test and deliver one (1) HS 601HP type Spacecraft for PAS 6B (hereinafter referred to as "PAS 6B" or the "Spacecraft"), Documentation and Related Services (as defined in Article 4) in accordance with the provisions of this Contract and in the manner specified under Exhibits A, B, C and D hereto. 3.2 All materials and services specified in Exhibit A, "PAS 6B Statement of Work," shall meet the requirements of Exhibit B, entitled "PAS 6B Spacecraft Specification." 3.3 If Contractor has not made delivery [************************ ************************************************************** *******] or if, prior to the Launch Date, [******************* ************************************************************** ******] Buyer at its election may: [*** **************************************************** **************************************************** **************************************************** ***********] [*** **************************************************** **************************************************** **************************************************** **************************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 5 ***************************************************** ***************************************************** ***************************************************** ***************************************************** ***************************************************** ***************************************************** **************] Any such election shall be made by Buyer in writing. [******** ************************************************************** ************************************************************** ************************************************************** ************************************************************** ************************************************************** *****] 3.4 [************************************************************* ***************************************************]in accordance with: (i) current directives and instructions in the Hughes Spacecraft Operators Handbook, utilized at either Buyer's Operations Control Center (OCC) or Contractor's Mission Control Center (MCC); and (ii) any other Documentation utilized, including that Documentation which takes into consideration the unique or special characteristics of the contracted Spacecraft. [************************************** ************************************************************** ************************************************************** ********] Contractor has responsibility and liability for the Mission Control Center. Buyer has responsibility and liability for the Operations Control Center and its associated ground station(s). 3.5 Spacecraft, Documentation and Related Services described above shall be [***] Filed separately with the Commission pursuant to a request for confidential treatment. 6 delivered to Buyer at the indicated locations on the dates set forth in Article 4 entitled, "Deliverables and Schedule" herein. 7 ARTICLE 4. DELIVERABLES AND SCHEDULE 4.1 The following deliverables to be furnished under this Contract shall be furnished at the designated location(s) on or before the dates specified below: - ------------------------------------------------------------------------------- Date of Shipment, Location of Shipment, Delivery Delivery or or Performance Performance Deliverable(s) - ------------------------------------------------------------------------------- o Shipped from Contrac- 1. One PAS 6B Shipment on September tor's facility. Spacecraft 29, 1998 ("Shipment Date") o Delivery Site at to support Launch Date of Ariane facility, October 20, 1998* Kourou, French Guyana (subject to change pursuant to Paragraph 4.2.) - ------------------------------------------------------------------------------- o Performance Site to be 2. Launch Support, In Accordance with determined pursuant to Mission Operations Exhibit A Paragraph 4.2. and In-Orbit o Fillmore, California Testing ("Related Services") o Castle Rock, Colorado o El Segundo, California - ------------------------------------------------------------------------------- 3. Documentation In Accordance with 1500 Hughes Way ("Documentation") Exhibit A Long Beach, California - ------------------------------------------------------------------------------- *Contractor agrees to ship the Spacecraft from its facility on or before such Shipment Date in order to support the launch of the Spacecraft on the Launch Date in accordance with the requirements of this Contract and the Exhibits hereto. [************* ********************************************************************* **************************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 8 4.2 Designation of Launch Vehicle. 4.2.1 The initial launch vehicle (the "Launch Vehicle") designation for the Spacecraft is an Ariane launch vehicle. Buyer may change the designation of the Spacecraft's Launch Vehicle at any time on or before [********] months prior to the scheduled Launch Date for the Spacecraft, in which event the Contract Price shall be increased or decreased by the applicable amount specified in Paragraph 5.3. If, subsequent to the date that is [********] months prior to such Launch Date, Buyer requests a change in the Launch Vehicle or Approved Storage Facility for the Spacecraft, such request shall be dealt with as a Change Order Request of Buyer under Article 29. 4.2.2 Buyer shall pay the costs of delivering the Spacecraft to the Launch Site, which costs are included in the Contract Price. 4.3 Contractor shall be responsible for obtaining and maintaining: (i) all U.S. Government export licenses to enable export of the Spacecraft, related test and support equipment to the Launch Site and (ii) all authorizations required for the performance of this Contract. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 9 ARTICLE 5. PRICE 5.1 The total price (the "Contract Price") for Contractor to provide the Spacecraft, Documentation and Related Services shall be [**********************************************] 5.2 Buyer shall pay Contractor the Contract Price stated in Paragraph 5.1 above in accordance with Article 6, Paragraph 6.2 of this Contract. 5.3 The Contract Price stated in Paragraph 5.1 is contingent upon the utilization of the Launch Vehicle initially designated for the Spacecraft in Paragraph 4.2.1. If Buyer changes the designated Launch Vehicle for the Spacecraft in accordance with Paragraph 4.2.1 (as opposed to Article 29), the Contract Price shall be adjusted in accordance with the following table: Table 5.3.1 Adjustment to Contract Price -------------------------------------------------- Launch Vehicle Adjustment -------------------------------------------------- Delta III [********] -------------------------------------------------- Atlas IIAS/AR [********] -------------------------------------------------- Proton [*********] -------------------------------------------------- 5.4 Any adjustment to the Contract Price under Paragraph 5.3 shall be allocated pro rata over the entire Payment Plan for such Spacecraft (including In-Orbit Performance Incentive Obligations). Adjustments allocated to payments already made shall be promptly paid by Buyer or refunded by Contractor, as the case may be. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 10 5.5 Buyer agrees to pay to Contractor a delivery incentive (the "Delivery Incentive") as follows: (i) Buyer shall pay to Contractor an additional amount of [**************************************] in the event that [*************************************** ******************************************************* ******************************************************* ******************************************************* ******************************************************* ******************************************************* ***************] (ii) In addition to any amount in clause (i) above, Buyer shall pay an additional amount equal to [****************************************************** *******************************************] up to a maximum amount in this clause (ii) of [**************** *********************] and a maximum total Delivery Incentive under clauses (i) and (ii) of *************** ******************************] Contractor shall submit an invoice for any Delivery Incentive after such amount is earned, and Buyer shall pay such Delivery Incentive within thirty (30) days of receipt by Buyer of such invoice. [**************************************************** ************************************************************** ************************************************************** ************************************************************** ************************************************************** **********] Notwithstanding anything herein to the contrary, in the event that Contractor [******************************** ************************************************************** ************************************************************** **********] in achieving any part of the Delivery Incentive provided by this Paragraph, Contractor [********************* *********************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 11 ***************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 12 ARTICLE 6. PAYMENTS 6.1 Pursuant to the terms set forth in this Article 6, and subject to Buyer's rights, defenses and remedies as expressly stated in this Contract, Buyer shall pay to Contractor the Contract Price as stated in Article 5 herein for the applicable Spacecraft, Documentation, and Related Services under this Contract. 6.2 Invoices shall be prepared and submitted by Contractor for each Spacecraft in a form reasonably acceptable to Buyer. Payments to Contractor for each Spacecraft shall be made according to the following payment plans: [**********] [*****************************] ---------------------------------------------------------------------- [*************] [****************] [*****] [**] [**] ---------------------------------------------------------------------- [**************] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [****] [****] [****] ---------------------------------------------------------------------- [******************** *******] [****] [****] ---------------------------------------------------------------------- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 13 [************************ **********************] [****] [****] ---------------------------------------------------------------------- [******************** ***************] [****] [****] ---------------------------------------------------------------------- [******************* ************************] [****] [****] ---------------------------------------------------------------------- (1) [***************************************************************** ****************************************************************** ****************************************************************** ****************************************************************** ********] (2) [*******************************************] 6.3 Incentives Obligations. 6.3.1 The following definitions are applicable to this Section 6.3: 6.3.1.1 "Specified Operation Lifetime" means fifteen (15) years. 6.3.1.2 "Successfully Operating Payload". The Spacecraft shall be equipped with one or more Payloads, as specified in Exhibit B. Each Payload shall be deemed to be Successfully Operating if at least that number of Transponders that is one more than one-half of the total number of Transponders within such Payload are Successfully Operating Transponders (as defined below). [***] Filed separately with the Commission pursuant to a request for confidential treatment. 14 6.3.1.3 "Successfully Operating Transponder". A Successfully Operating Transponder is a Transponder which meets either or both of the following two criteria: (a) The Transponder meets or exceeds the performance specifications set forth in Exhibit B. For the avoidance of doubt, if the Spacecraft is placed into inclined orbit, then the Transponders shall be deemed not to meet the criteria stated in this Paragraph 6.3.1.3(a) at such time as the Spacecraft would have ceased to have a Useful Commercial Life, (as mutually determined by the Parties) had it not been placed in such an orbit. (b) The Transponder, while not meeting or exceeding the performance specifications, provides Buyer with no material loss in its commercial value. A Transponder shall also be deemed to be a Successfully Operating Transponder if it meets the performance specifications through use of any redundant or spare equipment not already in use by another Transponder. 6.3.1.4 "Useful Commercial Life". The Useful Commercial Life of a Spacecraft means the period beginning on the Commencement Date and ending on the earlier to occur of (i) the date on which there is just sufficient fuel remaining on board the Spacecraft only to eject the Spacecraft from its geostationary orbital location or (ii) the date on which at least one-half of the Transponders on each Payload are not Successfully Operating Transponders. 15 6.3.1.5 "Successfully Injected Spacecraft". The Launched Spacecraft shall be deemed to be a Success- fully Injected Spacecraft if: (a) The transfer orbit/spacecraft attitude meets the following required criteria: (1) Perigee altitude error is less than or equal to +/-3 sigma; (2) Apogee Altitude error is less than or equal to +/-3 sigma; (3) Inclination error is less than or equal to +/-3 sigma; (4) Argument of perigee error is less than or equal to +/-3 sigma; and (5) The Spacecraft has been separated with attitude rate errors of less than or equal to +/-3 sigma and (b) The Spacecraft has not suffered physical damage which resulted from Launch Vehicle malfunction. The calculated amount of Useful Commercial Life (the "Calculated Operational Lifetime") shall be mutually determined by Buyer and Contractor, based on standard engineering practices, using measured actuals of the Spacecraft, existing at the time of the operational hand-off of the Spacecraft to Contractor from the Launch Vehicle provider. If the attained transfer orbit/Spacecraft 16 attitude does not meet the criteria stated in this Section, but the Calculated Operational Lifetime is greater than or equal to the Specified Operational Lifetime for the Spacecraft, then the Spacecraft shall be deemed to have been a Successfully Injected Spacecraft. If, on the other hand, the attained transfer orbit/Spacecraft attitude does not meet the criteria stated above, and the Calculated Operational Lifetime is less than the Specified Operational Lifetime, then the Spacecraft shall be deemed not be a Successfully Injected Spacecraft. If Buyer and Contractor cannot agree on the Calculated Operational Lifetime, then the Parties shall resolve such disagreement in acceptance with the dispute resolution procedures set forth in Article 33. During such dispute resolution procedure, Buyer shall commence all payments under Section 6.3.2 to Contractor based on Contractor's calculation of such Calculated Operational Lifetime, except only the disputed amount(s) which shall be paid by Buyer in escrow as set forth in Section 29.4, and the prevailing party shall be entitled to interest as provided therein. 6.3.1.6 "Incentives Interest Rate". The Incentives Interest Rate shall be the lesser of (i) the prime rate of Chase Manhattan, New York, as calculated on the first business day of each month for which interest is calculated plus [****************** ***********************************] or 9ii0 [*************************** *********************] 6.3.1.7 "Commencement Date". The Commencement Date shall be the date on which Buyer receives written certification from Contractor that, based upon the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 17 results of completed in-orbit performance tests, at least one Payload is a Successfully Operating Payload. 6.3.2 Buyer shall pay to Contractor the Incentives Obligations and the Change Order Profit Component (if applicable), as follows: 6.3.2.1 Incentives Obligations and Change Order Profit Component. Subject to Section 6.3.2.3 through 6.3.2.6, Buyer shall be obligated to pay to Contractor the Incentives Obligation and any Change Order Profit Component (if applicable), as follows: Buyer shall pay Contractor an equal monthly payment that, when calculated on a net present value basis to the Commencement Date using the Incentives Interest Rate, equals the total amount of Incentives Obligations plus Change Order Profit Component due hereunder. For example, if the Spacecraft is a Successfully Injected Spacecraft and on the Commencement Date all Transponders on the Spacecraft are and continue to be Successfully Operating Transponders for fifteen (15) years, assuming the maximum [** ******************************] for the entire period, the monthly Incentives Obligations payment would be [**************] (the "Nominal Payment"). If the Incentives Interest Rate is less than [*** **********************] for any given month, the Incentives Obligations payment will be less than the Nominal Payment. In such circumstances, the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 18 amount of each month's payment will be calculated on a net present value basis to the date of the last month's payment using the remaining unpaid principal as the new principal, the Incentives Interest Rate, and a term equal to the number of months remaining in the Incentives period. The Parties shall agree in writing upon an appropriate allocation of the portion of the Incentive Obligations which shall be payable for each Payload on the Spacecraft. The Incentives Obligations, identified above, shall be payable in 180 equal and consecutive monthly installments over a fifteen (15) year life of the Spacecraft, except as may be adjusted as set forth herein. Except as provided in Paragraph 6.3.4, the first installment of each Incentives Obligations shall be paid on the Spacecraft's Commencement Date. A sample schedule matrix showing Incentives Obligations payments for fifteen years, assuming fully successful operation, and with varying hypothetical interests rates will be attached to this Contract as Exhibit I. The foregoing notwithstanding: (a) If the Spacecraft is not a Successfully Injected Spacecraft pursuant to Section 6.3.1.4 but is successfully placed into its on-station orbit by Hughes during the "Transfer Period" 19 (defined as the period from separation of the Launch Vehicle through on-station acquisition) then, subject to Section 6.3.2.3, Buyer shall pay the Incentives Obligations for the Spacecraft in equal and consecutive monthly installments over a period of the Spacecraft's On Station Operational Lifetime (defined at Section 6.3.2.1(b)). (b) If the Spacecraft is Successfully Injected, but is not successfully placed into its on-station orbit by Contractor during the Transfer Period, then the total amount of the Incentives Obligations for the Spacecraft shall be multiplied by a percentile equal to (i) the On-Station Operational Lifetime divided by (ii) the Calculated Operational Lifetime, which percentile shall, in no event, be greater than one. Subject to Section 6.3.2.3, Buyer shall pay such Incentives Obligations for the Spacecraft in equal and consecutive monthly installments over a period of the Spacecraft's On-Station Operational Lifetime. The "On Station Operational Lifetime" shall be mutually determined by Buyer and Contractor, based on standard engineering practices, using measured actuals of the Spacecraft, existing at the end of the Transfer Period. However, should the Spacecraft continue to operate successfully beyond the On-Station Operational Lifetime, Contractor will continue to earn Incentives Obligations at the same monthly rate up to the Specified Operational Lifetime. (c) Finally, if the Spacecraft is not a Successfully Injected Spacecraft and, in addition, is not successfully placed into its on-station orbit during the Transfer Period, then the total 20 amount of the Incentives Obligations shall be multiplied by the sum of (A)(i) the Specified Operational Lifetime, plus (ii) the On-Station Operational Lifetime, minus (iii) the Calculated Operational Lifetime, divided by (B) the Specified Operational Lifetime, which percentile shall, in no event, be greater than one. Subject to Section 6.3.2.3, Buyer shall pay such Incentives Obligations for the Spacecraft in equal and consecutive monthly installments over a period of the Spacecraft's On-Station Operational Lifetime. For purposes of any provision of this Contract, if the Incentives Obligations or related payment periods are to be recalculated, the monthly installments due shall be recalculated to reflect the imputed interest element that is reflected in the payment plans specified above. 6.3.2.2 Notwithstanding the foregoing, if at any time Buyer continues to utilize for revenue-producing purposes any Transponder that is not a Successfully Operating Transponder, then Buyer shall pay a pro rated amount of the Incentives Obligation attributable to such Transponder that is proportionate to the partial benefit that Buyer derives from such Transponder (the "Partial Incentive Payment"), all as mutually agreed upon by the Parties in good faith. 6.3.2.3 Except for any Change Order Profit Component (which is non-contingent), payment of any Incentives Obligation shall be contingent upon the Transponders being Successfully Operating Transponders, as set forth herein, 21 on the applicable Payload and shall be pro-rated, therefore, on a Transponder equivalent-by-Transponder equivalent basis over the duration of the applicable term of such Obligation; provided, however, that beginning on the date, if any, that any one or more of the Payloads are no longer a Successfully Operating Payload, as and when ascertained pursuant to in Section 6.3.2.4 (the "Degraded Payload"), then Buyer's then-remaining Incentives Obligations for such Payload(s) (exclusive of any Change Order Profit Component, as applicable) shall be deemed extinguished. 6.3.2.4 Whether any Transponder is not Successfully Operating shall be mutually determined by Buyer and Contractor, based on relevant technical data, reports and analyses, and each Party will make available to the other Party for its review, upon reasonable request, all data used in making such determination. If Contractor disagrees with such determination, then the Parties shall resolve such disagreement in accordance with the dispute resolution procedure set forth in Article 33. 6.3.2.5 If the Spacecraft has not been, or is not being, Properly Operated by the Buyer, and any Transponders thereof are not Successfully Operating Transponders, then the Transponders of the Spacecraft which were Successfully Operating prior to such improper operation of the Spacecraft shall be deemed to be Successfully Operating Transponders for purposes of Contractor's entitlement to payment of any applicable Incentives Obligations for such period as such Transponders would have reasonably been 22 predicted to continue to be Successfully Operating had the Spacecraft and transponder thereon been Properly Operated by Buyer; provided, however, that if the failure is the result of a defect in the deliverable software or if Buyer demonstrates that the failure of any Transponder to be Successfully Operating was not caused primarily, directly or indirectly, by any act or omission of Buyer, its agents, Subcontractors, Consultants or representatives of any kind, then the foregoing provision shall not apply with respect to such Transponder. 6.3.2.6 Buyer may prepay any portion of the Incentives Obligations or the Change Order Profit Component pursuant to the schedule matrix attached as Exhibit 6.3.2.1. Any remaining Incentives Obligations so prepaid shall be subject to refund by Contractor to Buyer, in any instance and to the extent that Buyer's obligation to make such payments is relieved pursuant to this Article 6, as outlined in the last sentence of Section 6.3.4.1 hereof. 6.3.3 "Spacecraft Retirement Payment". At any time following the Spacecraft's Delivery, Buyer may, at its option, cease to utilize the Spacecraft for any purpose; provided, however, that if Buyer does cease using the Spacecraft (or if the Spacecraft is rendered a total loss by virtue of Buyer's failure to Properly Operate the Spacecraft), then, upon the exercise date of such option or the declaration of the Spacecraft as a total loss as applicable, all remaining Incentives Obligations payments for any Transponder (and any Change Order Profit Component, if applicable) (subject to the provisions of Section 6.3.2.3 through 6.3.2.5) shall become 23 immediately due and payable, all relative to the Spacecraft; and Buyer shall pay to Contractor such amounts, in immediately available funds, along with the outstanding balance of principal and accrued interest on any other outstanding payment obligations with respect to the Spacecraft, if any, as of such date. In determining the amount of principal and interest due, present value analysis discounted at the Incentives Interest Rate per annum shall be done for any scheduled payment stream previously created by the Parties hereunder. Notwithstanding the foregoing, Buyer shall have the right to cease using the Spacecraft and remove it from its orbital location at any time following the expiration of the Spacecraft's Useful Commercial Life, without payment of such Spacecraft Retirement Payment. 6.3.4 Incentive Obligations and Launch Delay 6.3.4.1 If the Spacecraft has not been launched by the 121st day after Delivery of the Spacecraft, then, except as set forth in Paragraph 6.3.4.2, the first of the equal and consecutive monthly installment payments for Incentive Obligations on the Spacecraft shall be due and payable and the fifteen year period shall be deemed to have begun for purposes of this Paragraph 6.3 and such payments shall commence (the "Pre-Launch Incentive Payments"). If upon the Commencement Date or at any time thereafter, any Transponder ceases to be a successfully Operating Transponder or a Payload becomes a Degraded Payload, then Contractor shall deliver to Buyer a refund (without interest) of that portion of the Pre-Launch Incentive Payment 24 attributable to such Transponder or Payload, taking into account the amount of such time such Transponder or Payload met the performance specifications, and Buyer's subsequent Incentives Obligations shall be reduced thereafter on a pro rata basis; provided, if applicable, Buyer shall receive a credit to the extent of any Pre-Launch Incentive Payments, to be applied as an offset against Buyer's consecutive monthly installment payments for the Incentives Obligations otherwise due and payable for the months immediately following the Commencement Date. 6.3.4.2 Subject to the second sentence below, if on or before the 121st day following the Satellite's Delivery Date, the Satellite has not been Launched, then the first of the equal and consecutive monthly installments payments for the Incentives Obligations on the Spacecraft shall be due and payable on the earlier to occur of the Spacecraft's Commencement Date or the 241st day following such Spacecraft's Date of Delivery (except that interest on such Incentives Obligations shall begin to accrue on the 121st day following the Delivery Date, as such date may be modified herein). If, however, the Spacecraft has not been Launched due primarily to (1) Contractor's Fault after Delivery or (2) Contractor's failure to timely meet the Spacecraft's scheduled Delivery Date (where such failure in Delivery is not caused by a Buyer's Delay) (or a combination of clauses (1) and (2) immediately above) then the first of the equal and consecutive monthly installments of the 25 Incentives Obligations on the Spacecraft shall be due and payable on, and interest shall not accrue until, the Causation Date. If upon Spacecraft Commencement, or at any time thereafter, any Transponder on the Spacecraft (which has been subject to a Launch delay under this Paragraph 6.3.4.2) ceases to be a Successfully Operating Transponder or a Payload becomes a Degraded Payload, then Contractor shall deliver to Buyer a refund (without interest) of that portion of the Pre-Launch Incentives Payments attributable to such Transponder or Payload, taking into account the amount of time such Transponder or Payload met the performance specifications, and Buyer's subsequent Incentives Obligation for the affected Payload on the Spacecraft shall be reduced thereafter on a pro rata basis; provided, however, that Buyer shall receive a credit to the extent of any Pre-Launch Incentive Payments, such credit to be applied as an offset against Buyer's consecutive monthly installment payments for the Incentives Obligations otherwise due and payable for the months immediately following the Commencement Date. 6.3.4.3 If, for any reason other than primarily Contractor's Fault, the Spacecraft has not been Launched within 24 months following the Spacecraft's Delivery Date, then the full amount of the Incentives Obligations (and any Change Order Profit Component, if applicable) (including principal and accrued interest, if any) shall become immediately due and payable upon the last day 26 of such 24th month. If, however, the Spacecraft is subsequently Launched within 54 months of the Delivery Date and any Transponder of the Spacecraft ceases to be a Successfully Operating Transponder or a Payload becomes a Degraded Payload, then Buyer shall be entitled to a proportionate refund (without interest) for any Incentives Obligations (and any Change Order Profit, if applicable) paid for such Transponder or Payload, taking into account the amount of time such Transponder or Payload met the performance specifications. If, for any reason, the Spacecraft has not been Launched prior to the third anniversary of the Delivery Date (the "Third Anniversary"), then Buyer shall have an option (the "LOPS/MOPS Option"), exercisable in writing received by Contractor on or before the Third Anniversary, to extend its right to utilize the Related Services for the Spacecraft to the fifth anniversary of the Delivery Date (the "Extension Period"). If Buyer does not timely exercise the LOPS/MOPS Option, then Contractor shall credit any unused portion of the Baseline Launch Costs for the Spacecraft against any due and unpaid payment obligations of Customer under this Contract (the "LOPS/MOPS Refund"). If Buyer timely exercises the LOPS/MOPS Option, then the price associated with the Related Services (pursuant to Paragraph 6.3) for the Spacecraft during the Extension Period, shall be increased by a [****************************] beginning on the Third Anniversary. Buyer shall be obligated to pay such Escalation Amount within 30 days of receipt [***] Filed separately with the Commission pursuant to a request for confidential treatment. 27 of invoice from Contractor. In any case, Contractor's obligation to provide such services shall terminate on the date which is fifty-four (54) months (or as early as thirty-six (36) months) from the Delivery Date for the Spacecraft. If Contractor's obligation to provide Launch and Mission Operations Services is terminated under the immediately preceding sentence, then Buyer shall receive a LOPS/MOPS Credit or LOPS/MOPS Refund, as applicable. 6.3.4.4 If, for any reason, other than Contractor's Fault, a launch failure occurs between the time of Launch and the Commencement Date (or if no Commencement occurs), then the full amount of the Incentives Obligations (and any Change Order Profit Component, if applicable) (the "Recoverable Amount(s)") shall become immediately due and payable upon the date of such launch failure. Contractor shall be entitled to obtain payment of such Recoverable Amounts from the proceeds of the launch insurance obtained by Buyer and shall be entitled to a priority in obtaining such proceeds over Buyer and all other parties or claims; provided, however, that nothing herein shall relieve Buyer of its obligations to pay to Contractor all such Recoverable Amounts, as set forth herein. During the six (6) months immediately following such launch failure, Buyer shall use best reasonable efforts to obtain the proceeds of its launch insurance to pay Contractor the Recoverable Amounts, hereunder. Provided further, however, that if Contractor does not receive all such Recoverable 28 Amounts from the proceeds of Buyer's launch insurance within such six (6) month period, then Buyer shall be obligated immediately to compensate Contractor for, and Contractor may also look to Buyer directly for satisfaction of, all such Recoverable Amounts. For purposes of this Paragraph 6.3.4.4, "Launch" shall mean, with respect to an Ariane IV Launch Vehicle, the ignition of the first stage engines of the Launch Vehicle, if said ignition is followed by opening of the table clamps with consequent release of such Launch Vehicle. 6.4 Contractor shall not be obligated to deliver the Spacecraft to the Launch Site if there are any outstanding Delinquent Payments owed by Buyer to Contractor with respect to such Spacecraft under this contract one month prior to shipment of such Spacecraft from the Contractor facility. "Delinquent Payments" are defined as those payments not received by Contractor within thirty (30) days of the dates due as defined in Paragraphs 6.2.1 and 6.2.2 above. Once Buyer has paid Contractor for any "Delinquent Payments" and any interest accrued in accordance with Paragraph 6.6 below, Contractor shall use its reasonable best efforts to ship such Spacecraft to the Launch Site so as to enable launch on the scheduled Launch Date and in any event to make shipment as soon as practicable and no later than sixteen (16) weeks after payment by Buyer of such Delinquent Payments. Buyer will be responsible for and will pay to Contractor any reasonable costs and [***] profit on such costs that Contractor may incur as a result of a delay in delivery due to Buyer's Delinquent Payments. Notwithstanding the foregoing, this Section 6.4 shall not relieve Contractor of its obligation to deliver a Spacecraft, and no "Delinquent Payment" shall be deemed to have occurred, due to any non- [***] Filed separately with the Commission pursuant to a request for confidential treatment. 29 payment by Buyer on account of an alleged breach by Contractor or other dispute as to such payment. In such event, Buyer shall, within thirty (30) days of the date such payment is due, pay the full amount of such payment into an interest-bearing escrow account to be established at Bank of America, Concord, California. Upon settlement of the dispute as to such payment and alleged breach in accordance with Article 33, the Party entitled to the amount in escrow shall receive such amount together with all accrued interest thereon and the other Party shall pay all costs and fees associated with the escrow of such amount. 6.5 Invoice 6.5.1 Invoices submitted to Buyer for payment shall contain a cross-reference to the Contract number and the date specified in the Payment Plan of Paragraphs 6.3.1. Contractor shall submit one (1) original invoice for the Spacecraft in each instance to: PanAmSat Corporation One Pickwick Plaza Greenwich, CT 06830 Fax: (203)622-6664 Attention: Robert Bednarek, Senior Vice President and Chief Technology Officer cc: Stephen G. Salem, Senior Counsel Marty Wolff 6.5.2 Invoice amounts, as specified in Paragraph 6.3, provide for billings to be submitted by the 15th day of each month and shall be paid by Buyer within thirty (30) days upon receipt of the invoice by Buyer. 30 6.6 Late Payments In the event of a failure by the Buyer or the Contractor to make a payment required pursuant to this Contract, the delinquent Party shall pay interest at the rate of [**** ********************] on the overdue amount for the number of days that the payment is overdue, commencing on the date payment is due and terminating on the date the overdue amount is paid in full. Notwithstanding the foregoing, this Section 6.6 shall not apply to any payment made into escrow in accordance with Section 29.4. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 31 ARTICLE 7. SPACECRAFT LAUNCH DATE 7.1.1 "Launch Date" Defined. The calendar date during which a Launch will occur. The Launch Date shall be notified by Buyer to Contractor no later than six (6) months prior to the first day of the applicable Launch Slot and once established, shall become an express term of this Contract. As of the Effective Date of this Contract, the Launch Date shall be October 20, 1998, subject to change in accordance with this Article 7. 7.1.2 "Launch Window" Defined. A period of time within the Launch Date during which a Launch can occur and meet mission requirements. The Launch Window shall be established by notified by Buyer to Contractor no later than forty-five (45) days prior to the Launch Date and once established, shall become an express term of this Contract. 7.1.3 Adjustment of dates. The time periods as delineated in Sections 7.1.1 and 7.1.2 shall be adjusted to reflect applicable launch provider contracts, consistent with ordinary practices of such providers as familiar to the Parties. 7.2 The Contract Price set forth in Paragraph 5.1 includes Contractor furnished launch support services, post launch support services, in-orbit test support services, and post title transfer monitoring and command of the Spacecraft if Buyer invokes the remedial provisions of Article 3, Paragraph 3.3. 7.3 No less than sixteen (16) weeks prior to the Launch Date, Buyer shall order Contractor by notice in writing to commence launch campaign preparations. 32 7.4 If a Spacecraft Launch Date is postponed for any reason other than the sole fault of Contractor, excluding any postponement due to an Excusable Delay as defined in Article 12, the Parties shall negotiate in good faith to determine an equitable adjustment to the price and affected terms of this Contract, if any. If the cost of supplies or materials made obsolete or excess as a result of a such postponement is included in the equitable adjustment, Buyer shall have the right to prescribe the manner of disposition of such supplies or materials. Costs included in the equitable adjustment shall include but not be limited to: support personnel standby; extra travel expenses; transport termination or rescheduling fees and a profit rate of [********************] 7.5 Notwithstanding the foregoing, if a Spacecraft Launch Date is postponed by either Party due to an Excusable Delay, as defined in Paragraph 12.1 herein, the terms of Article 12 herein shall govern such postponement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 33 ARTICLE 8. BUYER-FURNISHED ITEMS 8.1 The following facilities, equipment, and services ("Buyer-Furnished Items") shall be furnished by Buyer at no cost to Contractor, in a timely manner, so as to enable Contractor to perform the work described herein. 1) Facilities (buildings, power, phones and data lines) and enumerated services: (i) transportation of a Spacecraft, Contractor related test equipment and personnel within the Launch Site; (ii) storage of a Spacecraft and related test equipment for all force majeure events (which prevent Buyer from supplying Buyer-Furnished Items) and/or launch vehicle delays; (iii) fueling; (iv) photographs; (v) interface hardware at the Launch Site; and (vi) earth station facilities for IOT including appropriate RF facilities, but not specialized test equipment. 2) Reservation and procurement of launch services and associated services. Contractor will provide preliminary requirements of Item 1 above to Buyer no later than two (2) months after the Effective Date of this Contract to assist Buyer's compliance with this Article, which shall be consistent with what Contractor has generally required Buyer to secure for previous launches with the same launch provider. Subject to the confidentiality requirements of the applicable agreements, Contractor will be allowed to review the list of basic and optional service which Buyer has procured in Buyer's contract(s) for launch services. In the event that the Buyer-Furnished Items set forth above are not suitable for the intended purpose or are not provided in a timely manner, excluding 34 any excusable delay as defined in Article 12 herein, then Buyer shall be liable to Contractor for all applicable costs which shall include but not be limited to; procurement or rental of suitable substitutes for such Buyer Furnished Items at no higher than market prices; with title and possession of all such procured items reverting to Buyer after Contractor's use under this Contract; support personnel standby; extra travel expenses; transport termination or rescheduling fees; and installation/de-installation of communication links to the Launch Site and a profit rate of [*******************] In the event that the Buyer-Furnished Items are not suitable for the intended purpose or are not provided in a timely manner and the Contractor must procure or rent suitable substitutes, and the foregoing process has materially affected Contractor's ability to ship the Spacecraft on or prior to the Shipment Date, the parties agree to adjust the Shipment Date to account for any delay resulting from the non-suitability or non-timely provision of such Buyer-Furnished Items. 8.2 Contractor shall maintain a system to ensure the adequate control and protection of Buyer's Property. For the purposes of this Article, Buyer Property shall be defined as any item which Buyer provides to the Contractor or directs Contractor to maintain in storage or an inventory account under this Contract. Upon receipt of notification from Buyer, the Contractor shall complete and return within fifteen (15) working days a Property System Certification describing the system that will be used to control Buyer's Property. Additionally, Buyer's representative may, at its option and at no additional cost to Buyer, conduct surveillance at a reasonable time of the Contractor's Property Control System as Buyer deems necessary to assure compliance with the terms and conditions of this Article. 8.3 Contractor shall, commencing with its receipt and during its custody or the [***] Filed separately with the Commission pursuant to a request for confidential treatment. 35 use of any Buyer's Property, accomplish the following: A. Establish and maintain inventory records and make such records available for review upon Buyer's request; B. Provide the necessary precautions to guard against damage from handling and deterioration during storage; C. Perform periodic inspection to assure adequacy of storage conditions; and D. Ensure that Buyer's Property is used only for performing this Contract, unless otherwise provided in this Article or approved by the cognizant contracting officer. 8.4 Contractor shall not modify, add-on, or replace any Buyer Property without Buyer's prior written authorization. Contractor shall immediately report to Buyer's contract representative the loss of any Buyer Property or any such property found damaged, malfunctioning, or otherwise unsuitable for use. The Contractor shall determine and report the probable cause and necessity for withholding such property from use. 8.5 Upon termination or completion of this Contract, and upon request by Buyer, the Contractor shall perform a physical inventory, adequate for accountability and disposition purposes, of all Buyer's Property applicable to such terminated or completed agreement and shall cause its subcontractors and suppliers at every tier to do likewise. 36 ARTICLE 9. INSPECTION AND ACCEPTANCE 9.1 Inspection of all Hardware, documentation and Contractor's services provided hereunder shall take place in accordance with the terms of Article 10, entitled "Access to Work in Process," herein. 9.2 Preliminary Acceptance of the Spacecraft shall occur when all in-plant tests required to be performed by Contractor for the Hardware have been completed and the Contractor has demonstrated at the pre-ship review that the Hardware and contract deliverables meet the requirements of this Contract, at which time Buyer shall accept the Hardware on a Preliminary basis in writing within five (5) business days subject to completion of Launch Integration Facility and/or Launch Site tests specified in Exhibit C, Spacecraft Integration Test Plan. If the Hardware is unacceptable, Contractor shall promptly and at its expense, rectify the unsatisfactory Hardware and resubmit the Hardware for acceptance by Buyer as provided above. In either case, the Hardware shall be deemed accepted upon failure of Buyer to notify Contractor in writing within the above five (5) business days that it is accepted, rejected or that in Buyer's opinion further corrective action must be taken by the Contractor. In the event that Buyer has not given Preliminary Acceptance of the Spacecraft, Contractor shall not ship the Spacecraft from Contractor's facility without Buyer's prior written consent. 9.3 Final Acceptance of the Spacecraft shall occur upon the earliest of i) the completion of In-orbit Testing in accordance with Exhibit A, ii) fifty (50) days after Intentional Ignition (as defined in Article 16, Paragraph 16.2 of this Contract) or iii) immediately before a Partial Failure, Total Failure or Total Constructive Failure (as each such term is defined in the applicable Launch Insurance Contract or successor contract), which occurs at or after 37 Intentional Ignition. Buyer shall have access to Launch Integration Facility and/or Launch Site test results during the launch campaign in accordance with the provisions of Article 10, Paragraph 10.1 "Access to Work in Process." 9.4 With respect to deliverable Hardware which Buyer orders Contractor to store, the Hardware shall be stored at a location to be negotiated and Final Acceptance shall occur at the end of the [**********] warranty period as set forth in Article 16 herein, entitled "Spacecraft Warranty," or such other event mutually agreed upon between the Parties. 9.5 Non-Conforming Products. 9.5.1 If (i) the Spacecraft does not meet its weight requirements and (ii) Buyer will be required to pay for additional weight from the launch provider in order to achieve the Specified Operational Lifetime without delaying the placing of the Spacecraft in its orbital location by more than fifteen (15) additional days, then Contractor shall reimburse Buyer for such additional payments up to [********] 9.5.2 Any Preliminary Acceptance or Final Acceptance by Buyer of a Spacecraft that does not conform to the requirements of this Contract (whether or not related to weight) shall not affect the Parties rights and obligations under Paragraph 6.3 ("Incentive Obligations") with respect to the Spacecraft or other deliverable that does not perform to the specifications of this Contract. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 38 ARTICLE 10. ACCESS TO WORK IN PROCESS 10.1 Contractor shall afford Buyer access to work in progress being performed at Contractor's plants and at the Launch Integration Facility and/or Launch Site pursuant to this Contract, including technical data, documentation, and hardware, at reasonable times during the period of Contract performance, provided such access does not unreasonably interfere with such work or require the disclosure of Contractor's proprietary information to third Parties and subject to (i) Contractor's Security Procedures and (ii) U.S. or Foreign Government Regulations. 10.2 To the extent that the Contractor's major subcontracts permit, Contractor shall afford Buyer access to work being performed pursuant to this Contract in subcontractor's plants in the company of Contractor's representatives. Contractor shall exert its reasonable best efforts in subcontracting to obtain permission for Buyer access to those major subcontractors' plants. Major subcontracts are defined as those subcontracts in excess of [************ ********************************] 10.3 Buyer shall have the right to witness on a non-interference basis all system and subsystem tests scheduled by Contractor in connection with the performance of work under this Contract. If the system or subsystem tests are performed by a subcontractor of Contractor, Contractor shall take all reasonable steps to secure Buyer's access to the subcontractor's facility or facilities. Buyer's right to witness testing shall be on a non-interference basis with the subcontractor's activities and subject to (i) any subcontractor security procedures and (ii) U.S. or Foreign Government Regulations. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 39 ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY 11.1 Subject to provisions of Article 3 entitled "Spacecraft, Documentation and Related Services," Article 5 entitled "Price" and Article 12 entitled "Excusable Delays," Buyer may issue a written notice of default to Contractor if: (i) Contractor fails [***************************************** ********************] as confirmed in writing by the Contractor's and Buyer's Senior Executives and such failure may result in a delay in launch of more than [************** ****]; or (ii) Contractor fails to ship the Spacecraft on or before the Shipment Date other than due to the primary fault of Buyer or a Force Majeure Event and such failure to ship results in a delay of launch of the Spacecraft of more than {*************] days. Subsequent to the issuance of said notice, the Buyer may terminate this Contract in whole and thereafter elect remedies as identified in Paragraph 11.2 below. [**************************************************** ************************************************************ ************************************************************ ************************************************************ ************************************************************ **********] 11.2 If Buyer terminates this Contract as provided in Paragraph 11.1 herein, Buyer, at its sole option, shall either: (i) take title to all deliverable hardware, all hardware in process which ultimately would have been deliverable by Contractor and all drawings and data produced by Contractor which ultimately would have been deliverable by Contractor, the cost of which has been charged or becomes chargeable to any work terminated plus all reasonable reprocurement costs up to a maximum amount of [*******************************]; or (ii) receive a refund of all payments submitted to Contractor by the Buyer for performance of [***] Filed separately with the Commission pursuant to a request for confidential treatment. 40 this Contract for the portion terminated by Buyer, plus [*********************************************************** ************************************************************ ************************************************************ ***********************************] and Contractor shall retain title and possession to all terminated Hardware which ultimately would have been deliverable by Contractor. 11.3 Except as expressly provided in Paragraph 11.4, there will be no termination for default after Intentional Ignition of the Launch Vehicle for the Spacecraft. 11.4 In the event that the delivery of the Certain Documentation listed on Exhibit E is delayed (other than due to the primary fault of Buyer or Force Majeure Event) for more than [**********************************************************] Buyer may issue a written notice of default to Contractor and may thereafter terminate the Contract in part as to such Certain Documentation only. If Buyer elects to terminate this Contract in part as to such Certain Documentation, then Buyer shall be relieved of payment of [********************* ************************************************************ ************] (or any such amount already paid shall be refunded), and Contractor shall pay Buyer an additional [*********] for reprocurement costs. 11.5 If, after termination of this Contract (or portion thereof) under the provisions of this Article, it is determined for any reason that Contractor was not in default under the provisions of this Article, or that the default was excusable under the provision of Article 12 entitled "Excusable Delays," the rights and obligations of the Parties shall be the same as if notice of termination had been issued pursuant to Article 14, entitled "Termination for Convenience," or pursuant to Article 12, Paragraph [***] Filed separately with the Commission pursuant to a request for confidential treatment. 41 12.4, as the case may be. 11.6 Except as otherwise provided in the Contract, the rights and remedies of the Parties provided in this Article shall be in lieu of any other rights and remedies provided by law or in equity in the event Contractor or Buyer fails to meet its obligations under this Contract. Buyer shall have no other rights or remedies for late delivery of the Spacecraft, Documentation and Related Services under this Contract except for those rights and remedies expressly provided for in this Contract. 11.7 In the event Buyer elects the remedy set forth in clause (ii) of Paragraph 11.2, Contractor shall pay such amount as follows: [****************************] of the total amount to be paid by Contractor pursuant to such clause shall be paid within thirty (30) days of the effective date of termination; and (b) the remaining [********************] of the total amount to be paid by Contractor pursuant to such clause shall be paid upon the first to occur of (I) [******* ***************************************************] or (II) [*********************************************************** ************************************************************ ************************************************************ ************************************************************ ***************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 42 ARTICLE 12. EXCUSABLE DELAYS 12.1 If either Party or a subcontractor of either Party is delayed by act of God, or of the public enemy, fire, flood, earthquake, epidemic, quarantine restriction, strike, walkout, freight embargo, or any other event which is beyond their control or does not arise from the acts or omissions of either Party or its respective subcontractors, said delay shall constitute an excusable delay ("Force Majeure Events"). In the event of an excusable delay, there shall be an equitable adjustment to the time of delivery and/or performance stated in this Contract. The affected Party shall give notice in writing to the other Party within 10 working days that an excusable delay condition exists after learning of such delay. Such notification shall include the cause of the excusable delay, the expected length of the excusable delay, and alternate plans to mitigate the effect of the excusable delay. 12.2 If the affected Party, as defined in Paragraph 12.1 above, requests or experiences, on a cumulative basis, excusable delay(s) greater than [**********] days, the Parties shall enter into good faith negotiations to develop a mutual course of action and/or an equitable adjustment to the affected terms of this Contract. 12.3 Notwithstanding the foregoing, if the Launch Date for the Spacecraft defined in Paragraph 7.1 herein is delayed due to a Force Majeure event affecting Buyer's ability to furnish any item to be supplied by it under Article 8 hereof, Buyer shall reimburse Contractor for all reasonable expenses incurred as a result, including without limitation expenses for: support personnel standby; extra travel expenses; and transport termination or rescheduling fees. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 43 12.4 Notwithstanding anything herein to the contrary, in the event that a Force Majeure Event occurs and Contractor's performance of its obligations as to the Spacecraft is delayed or prevented for a period of [**************] or longer, then Buyer shall have the right to either: (i) terminate this Contract with respect to the Spacecraft upon thirty (30) days written notice or (ii) [******************] ************************************************************ ****************] The period of such delay shall be measured from the initial occurrence of such Force Majeure Event or Contractor fault (whichever occurred first). Notwithstanding the foregoing, Buyer agrees that [************************** ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ ************************************************************ *****************] 12.5 In the event of a termination under clause (i) of Paragraph 12.4, Buyer shall be entitled to a refund equal to [******** ************************************************************ *******************************************************] and Contractor shall retain title to all Deliverables produced by Contractor under this Contract with respect to the Spacecraft. For purposes of this Section 12.4, [************ ************************************************************ ************************************************************ ************************************************************ ******************] 12.6 In the event of [********************************] under clause (ii) of [***] Filed separately with the Commission pursuant to a request for confidential treatment. 44 Paragraph 12.4, the price (including any profit component) [***************************] shall be paid as follows: [****************************************************** ************************************************** **************] [******************************************************* ************************************************** ************************************************** ******************************] [******************************************************** ************************************************** ************************************************** ************************************************** **************] [******************************************************* ************************************************** ************************************************** **********************] Buyer and Contractor agree to negotiate in good faith the schedule for delivery of the Spacecraft [**********]. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 45 ARTICLE 13. AMENDMENTS The terms and provisions of this Contract shall not be amended or modified without specific written provision to that effect, signed by the Authorized Representative(s) of both Parties. These Authorized Representative(s) are identified in Article 27, "Notices and Authorized Representative(s)." No oral statement of any person shall in any manner or degree modify or otherwise affect the terms and provisions of this Contract. 46 ARTICLE 14. TERMINATION FOR CONVENIENCE 14.1 Buyer may terminate all or any portion of the work to be performed pursuant to this Contract upon five (5) days written notice to Contractor. Buyer shall pay Contractor, in the event of such termination, termination liability equaling all Costs (as defined in Paragraph 14.5 below) expended by Contractor for all work done up to the date of termination on the terminated portion of the Contract, settlements with subcontractors for work performed prior to termination on the terminated portion of the Contract, and Contractor's reasonable costs related to termination which would not otherwise have been incurred plus a [****] profit for the applicable termination costs and charges, but in no event more than the maximum termination liability that is set forth in Exhibit F hereto, as of date of termination, less amounts previously paid by Buyer to Contractor pursuant to the Payment Article; provided that the Parties agree that Exhibit F sets forth the maximum termination liability if the entire Contract is terminated under this Article 14, and that the maximum termination liability shall be pro rated appropriately in the event of a termination under this Article 14 of less than all of the work to be performed by Contractor. Buyer's termination liability shall also include Costs incurred by Contractor for the parts of the Base Spacecraft incorporated into the PAS 6B Spacecraft, but shall exclude any amounts retained or received by Contractor (whether for Costs, profits or otherwise) in connection with the termination of its agreement with a third party for the construction and delivery of the Base Spacecraft. Buyer shall pay the unpaid balance of such termination liability within thirty (30) days of Buyer's receipt of certification of Contractor's costs. In the event that Buyer has paid to Contractor any amount in excess of such termination liability, then Contractor shall refund such excess amount to Buyer within [***] Filed separately with the Commission pursuant to a request for confidential treatment. 47 thirty (30) days of certification of costs. In no event shall the termination liability exceed either the Contract price defined in Article 5 herein or the amount specified in Exhibit F. 14.2 In the event of termination by Buyer hereunder, and upon payment in full of all amount due (if any) under 14.1 above (or, if any amount is in dispute, payment of such amount into escrow in the manner set forth in Paragraph 6.4), all tangible work in process inventories generated under this Contract, with respect to the terminated work, shall become the property of Buyer. Buyer shall direct disposition of such property within sixty (60) days from date of termination (which disposition may include requesting Contractor to undertake mitigation efforts in accordance with Paragraph 14.4 below) or such other date as agreed to by the Parties. Final acceptance and transfer of title for all tangible work in process inventories to be delivered to the Buyer in the event of termination shall be the subject of separate negotiations between Buyer and Contractor and shall be subject to applicable U.S. Government Export Regulations. The expense of disposition shall be borne by Buyer. 14.3 In the event of partial termination, the Contract Price shall be adjusted accordingly. 14.4 At Buyer's request, Contractor shall use reasonable best efforts to identify an alternate use (i.e. sale to third Parties and/or internal utilization) for any Hardware affected by a termination under this Article 14, the Contractor shall submit a proposal to Buyer, which, at a minimum, defines (i) the applicable Hardware, (ii) the intended use of the Hardware, (iii) the original acquisition cost/value of the applicable Hardware, as available, and (iv) the sale/transfer payment(s) to be received by Buyer. Contractor 48 shall use its reasonable best efforts to obtain fair market value for the applicable Hardware. Buyer, at its sole option, may accept or reject the proposal submitted by Contractor. In the event that Buyer accepts the proposal submitted by Contractor, payment by Contractor to Buyer of the agreed upon payment value shall occur within thirty (30) days of the sale/transfer of the applicable Hardware, or such other payment period as mutually accepted between the Parties. If the Contractor's proposal is rejected by Buyer, if Contractor is unable to find any alternative use within two (2) years of being requested to do so or if Buyer so directs, then Title to the applicable Hardware shall be vested as stated in Paragraph 14.2 above. 14.5 As used in this Article 14, Contractor's "Costs" shall mean costs actually incurred by Contractor in performing its obligations hereunder (including G&A costs not to exceed [*****************] of such costs), all such costs to be determined in accordance with Contractor's normal accounting practices. Contractor shall provide to Buyer an invoice certified by the Chief Financial Officer of the company stating Contractor claim for costs properly includes only the costs specified in this paragraph. In the event Buyer desires independent verification of claim, Buyer may request to have independent certified public accountants (CPA) audit costs incurred by Contractor and report to the Parties. The CPA to perform such audit shall be selected by Buyer, subject to the approval of Contractor, which approval shall not be unreasonably withheld (and in any event shall not be withheld if Buyer selects a "Big Six" accounting firm). Such audit shall be at Buyer's expense unless such audit shows Contractor's costs to have been overstated (in which event Contractor shall bear the audit expense). Such audit shall constitute a final determination of actual costs notwithstanding the provision of Article 33; provided that, if the costs [***] Filed separately with the Commission pursuant to a request for confidential treatment. 49 determined by such report exceed the amount of Contractor's termination claim, Buyer shall only be obliged to pay the amount of Contractor's termination claim. 14.6 Contractor shall use its reasonable best efforts to include in its subcontracts for work hereunder on terms that will enable Contractor to terminate such subcontracts in a manner consistent with this Article 14. 50 ARTICLE 15. TITLE AND RISK OF LOSS 15.1 Title and risk of loss or damage in respect of all items to be delivered under this Contract shall pass from Contractor to Buyer as follows: 15.1.1 Risk of loss of the Spacecraft and title shall pass from Contractor to Buyer upon the earliest of: (i) the completion of In-orbit Testing in accordance with Exhibit A, (ii) fifty (50) days after Intentional Ignition (as defined in Article 15, Paragraph 15.2 of this contract) or (iii) immediately before a Partial Failure, Total Failure or Total Constructive Failure (as each such term is defined in the applicable Launch Insurance Contract or successor contract) which occurs at or after Intentional Ignition. 15.1.2 In respect to a Spacecraft which Buyer directs Contractor to store, title and risk of loss shall remain with the Contractor until Final Acceptance as specified in Article 9.4 herein. 15.1.3 Notwithstanding Paragraph 15.1.2 above, upon removal of the Spacecraft from storage, the Contractor shall not assume risk of loss relative to a Battery which Buyer directs Contractor to replace after the five-year storage period which disqualifies the battery for a 15-year mission. In that event, Article 30 herein entitled "Effects of Storage on Batteries," shall apply. 15.1.4 "Risk of Loss" for purposes of this Article 15 is limited to the responsibility and liability for a Partial Failure, Total Failure or Total Constructive Failure (as each such term is 51 as defined in the applicable Launch Insurance Contract or successor contract). Responsibility and liability for the Spacecraft prior to intentional ignition is with the Contractor. 15.2 In the event of damage to or destruction of Hardware when Contractor shall have risk of loss, Contractor shall repair or replace (at Contractor's option) said Hardware. The Buyer shall participate in the decision to repair or replace said Hardware and the provisions of Article 16 shall apply. 15.3 Insurance Provided By Contractor. The Contractor shall, at its own expense, provide and maintain the following insurance: 15.3.1 "All Risk" Insurance (i) The Policy for "All Risks" insurance shall insure the Contractor and name Buyer as additional insured and Loss Payee as their interest may appear. (ii) The insurance shall cover the Spacecraft while in or about the Contractor's and subcontractors' plants, while at other premises which may be used or operated by the Contractor for construction or storage purposes, while in transit, or while at the Designated Launch Site until Intentional Ignition, or while Spacecraft is stored by the Contractor at Buyer's direction until Final Acceptance as specified in Article 9.4. (iii) Such insurance shall be sufficient to cover the full replacement value or selling price of the Spacecraft and may be issued with deductibles, for which losses shall be borne by the Contractor. 52 (iv) This "All Risk" insurance shall be in force from the time of the Effective Date of this Contract and shall continue in effect until Contractor's liabilities have expired at intentional ignition. 15.3.2 Third Party Liability Insurance (i) The Policy(s) for Third Party Liability insurance shall be written on forms the Buyer may review and shall include Buyer as additional insured. (ii) This Third Party Liability insurance shall be in force from the time of the Effective Date of this Contract and shall continue in effect until Contractor's liabilities have expired at intentional ignition. (iii) The Policy(s) may be issued with deductibles, for which losses shall be borne by the Contractor. 15.4 General Insurance Requirements (i) The Contractor shall, upon request, provide to the Buyer certificates of the Insurance Policy(s) issued by an agent of the Contractor's Insurer(s) for coverage which the Contractor is required to provide pursuant to the provisions of these Articles. (ii) All Policies of insurance to be provided and maintained pursuant to these Articles shall require the insurer(s) or its authorized agent(s) to give each insured not less than thirty (30) days prior written notice in the event of cancellation or any proposed material change in such policies, except for ten (10) days prior written notice in the event of cancellation due to non- 53 payment of premium. (iii) The Contractor may also acquire and maintain, at its own expense, other insurance for amounts and perils, and upon such terms, conditions and deductibles as it may deem advisable or necessary to cover any loss or damage to persons or property that may occur as a result of the performance of this Contract. 54 ARTICLE 16. SPACECRAFT WARRANTY 16.1 Contractor warrants that the Spacecraft, upon successful completion of Spacecraft in plant Tests pursuant to Article 9 herein, shall be free from any defects in material or workmanship and shall conform to the applicable specifications and drawings, as evidenced by the acceptance criteria in Exhibits A-D herein. 16.2 This warranty shall start from the date of Preliminary Acceptance of the Spacecraft as stated in Article 9 herein, entitled "Inspection and Acceptance," and continue for a period of [***********] or until the "Intentional Ignition" (defined herein as the Intentional Ignition of any rocket motor on the first stage of the Launch Vehicle) of the applicable Launch Vehicle, whichever is earlier. [************ ************************************************************** ************************************************************** ************************************************************** ************************************************************** **************************************************]("Warranty Time Period"). Contractor shall not be liable in Contract or in Tort for any incidental, special, contingent, or consequential damages. 16.3 Buyer shall have the right at any time during the Warranty Time Period to reject any goods not conforming to this warranty and require that Contractor, at its expense, correct or replace (at Contractor's option) such goods with conforming goods. If any time during the Warranty Time Period Contractor fails to correct or replace such defective goods and fails to initiate reasonable efforts to correct or replace such defective goods within a reasonable period after written notification and authorization from Buyer, Buyer may then, by contract or otherwise, correct or replace such defective goods and equitably adjust the price. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 55 16.4 Except as otherwise expressly agreed upon in this Contract, Contractor shall have no liability, or responsibility in Contract or in Tort with respect to the Spacecraft after Intentional Ignition (as defined in Paragraph 16.2) of the Launch Vehicle. 16.5 THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE REMEDY FOR FAILURE BY CONTRACTOR TO FURNISH A SPACECRAFT THAT IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP AS SET FORTH IN PARAGRAPH 16.1 ABOVE. ALL OTHER WARRANTIES OR CONDITIONS IMPLIED BY ANY OTHER STATUTORY ENACTMENT OR RULE OF LAW WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED. CONTRACTOR AND ITS SUBCONTRACTORS SHALL HAVE NO LIABILITY IN CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR IN ANY OTHER MANNER WHATSOEVER FOR A SPACECRAFT AFTER INTENTIONAL IGNITION OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT. 16.6 Any limitations on warranties, liability or requests for indemnification from liability for the malfunction of delivered items which are imposed upon the Contractor by its various equipment suppliers shall be passed on directly to Buyer provided, however, nothing therein shall decrease or invalidate the rights of the Buyer during, or the length of, the Warranty Time Period as stated in this Article. 56 ARTICLE 17. INDEMNIFICATION 17.1 Each Party shall indemnify and hold the other and/or all its officers, agents, servants, subsidiaries, affiliates, parent companies and employees, or any of them, harmless from any liability or expense in connection herewith on account of damage to property (excepting other Spacecraft in flight) and injuries, including death, to all persons including but not limited to employees of the Parties, and their subcontractors, and of all other persons performing any part of the work hereunder, arising from any occurrence caused by an negligent act or omission of the indemnifying Party or its subcontractors, or any of them in connection with the work to be performed by such Party under this Contract. The indemnifying Party shall have the right, but not the obligation, to participate in any legal or other proceedings concerning claims for which it is indemnifying under this Article 17 and to direct the defense of such claims. However, with respect to such legal or other proceedings, the indemnifying Party shall pay all expenses (including attorneys fees incurred by the indemnified Party in connection with such legal or other proceedings) and satisfy all judgments, costs or other awards which may be incurred by or rendered against the indemnified Party. The indemnifying Party shall not settle any such claim, legal or other proceeding without first giving thirty (30) days prior written notice of the Terms and Conditions of such settlement and obtaining the consent of the indemnified Party, which consent shall not be unreasonably withheld or delayed. 17.2 Notwithstanding the foregoing, neither the Contractor nor its subcontractors shall have any liability in Contract or in Tort, for damages to or caused by the Spacecraft after Intentional Ignition (as defined in Paragraph 16.2), and Buyer shall obtain waivers of 57 subrogation rights from Buyer's insurers against Contractor, and affiliates and subcontractors of Contractor. 58 ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE 18.1 If the Spacecraft is not launched within six (6) months after its Preliminary Acceptance per Article 9, entitled "Inspection and Acceptance," and is subsequently ordered to be launched within [************] following its Preliminary Acceptance, it is agreed that the Spacecraft shall be returned at Contractor's option at Contractor's expense, to Contractor's facility for inspection and refurbishment. Any inspection and refurbishment undertaken by Contractor to meet the requirements of Article 16 entitled, "Spacecraft Warranty," shall be at Contractor's expense, including Spacecraft transit insurance. 18.2 If the Spacecraft is not launched within six (6) months after its Preliminary Acceptance and is subsequently ordered to be launched later than [**************] following its Preliminary Acceptance, it is agreed that the Spacecraft shall be returned, at Buyer's expense, to Contractor's facility for inspection and refurbishment. An equitable adjustment to Contract price for such inspection and refurbishment, to include a [***] profit component shall be negotiated by the Parties unless the fact that the launch is scheduled for later than [******************] is due to Contractor's negligent acts or omissions. 18.3 If the Spacecraft is returned to Contractor's facility for inspection and refurbishment per the terms of Paragraph 18.2 above, all charges to return the Spacecraft to the Launch Site shall be borne by Buyer. 18.4 If the Spacecraft has not been launched within [********** ****] after its preliminary Acceptance, neither Party shall be further obligated to the other with respect to the Spacecraft. Disposition of the Spacecraft shall [***] Filed separately with the Commission pursuant to a request for confidential treatment. 59 be at the option of Buyer with costs of such disposition to be borne by Buyer. 60 ARTICLE 19. PATENT/COPYRIGHT INDEMNITY 19.1 Contractor shall indemnify and hold Buyer harmless against any liability or expense as a result of claims, actions, or proceedings against Buyer alleging the infringement of any trademarks, United States Copyright or mask work, United States Letters Patent, any other intellectual property rights, by any article fabricated by Contractor and delivered to Buyer pursuant to this Contract as set forth below. 19.2 Contractor agrees to defend at its own expense any claim, action, proceeding or request for royalty payments or any claim for equitable relief or damages against Buyer, its officers, employees, agents, or subsidiaries based on an allegation that the manufacture of any item under this Contract or the use, lease, or sale thereof infringes any United States Letters Patent trademark, United States Copyright or mask work or any other intellectual property right, and to pay any royalties and other costs related to the settlement of such claim, action, proceeding or request and to pay the costs and damages, including reasonable attorney's fees finally awarded as the result of any claim, action or proceeding based on such request, provided that Contractor is given prompt written notice of such request or claim by Buyer and given authority and such assistance and information as is available to Buyer for resisting such request or for the defense of such claim, action or proceeding. Any such assistance or information which is furnished by Buyer at the written request of Contractor is to be at Contractor's expense. 19.3 In the event that, as a result of any such claim, action, proceeding or request: a) prior to delivery, the manufacture of any item is enjoined; or b) after delivery, the use, lease or sale thereof is enjoined, Contractor 61 agrees to utilize its best effort to either: (1) negotiate a license or other agreement with plaintiff so that such item is no longer infringing; or (2) modify such item suitably or substitute a suitable item therefore, which modified or substituted item is not subject to such injunction, and to extend the provisions of this Article thereto. In the event that neither of the foregoing alternatives is suitably accomplished by Contractor, Contractor shall be liable to Buyer for Buyer's additional costs and damages arising as a result of such injunction; provided however, that in no event shall Contractor's entire liability under this Article exceed [****************************************] for each Spacecraft. The existence of one or more claims, actions, proceedings or lawsuits shall not extend such amount. 19.4 The foregoing indemnity shall not apply to any infringement resulting from a modification or addition, by other than Contractor, to an item after delivery. 19.5 If the infringement results from the compliance by Contractor with the Buyer's directed designs, specifications or instructions, the Buyer will defend or settle, at its expense, any such suit against the Contractor. 19.6 The foregoing constitutes the Parties' entire obligation with respect to claims for infringement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 62 ARTICLE 20. RIGHTS IN INVENTIONS 20.1 As used in this Contract, "Program Invention" shall mean any invention, discovery or improvement conceived of and first reduced to practice in the performance of Work under this Contract. Information relating to Inventions shall be treated as proprietary information in accordance with the provisions of this Contract. Rights to inventions conceived solely by Contractor or its employees shall vest completely with Contractor. 20.2 Contractor shall be the owner of all Program Inventions invented solely by Contractor. Contractor grants Buyer a royalty-free, nonexclusive license in Program Inventions to use Program Inventions solely for the purposes of maintenance and operation of the Spacecraft and delivered Equipment. Contractor agrees that it will not revoke such license if Buyer is in compliance with the terms of the license. 20.3.1 In the case of joint Program Inventions, that is, inventions conceived jointly by one or more employees of both Parties hereto, each Party shall have an equal, undivided one-half interest in and to such joint Program Inventions, as well as in and to patent applications and patents thereon in all countries. 20.3.2 In the case of such joint Program Inventions, Contractor shall have the first right of election to file patent applications in any country, and Buyer shall have a second right of election. Each Party in turn shall make its election at the earliest practicable time, and shall notify the other Party of its decision. 63 20.3.3 The expenses for preparing, filing and securing each joint Program Invention patent application, and for issuance of the respective patent shall be borne by the Party which prepares and files the application. The other Party shall furnish the filing Party with all documents or other assistance that may be necessary for the filing and prosecution of each application. Where such joint Program Invention application for patent is filed by either Party in a country which requires the payment of taxes, annuities, maintenance fees or other charges on a pending application or on an issued patent, the Party which files the application shall, prior to filing, request the other Party to indicate whether it will agree to pay one-half of such taxes, annuities, maintenance fees or other charges. If within sixty (60) days of receiving such request, the non-filing Party fails to assume in writing the obligation to pay its proportionate share of such taxes, annuities, maintenance fees or other charges, or if either Party subsequently fails to continue such payments within sixty (60) days of demand, it shall forthwith relinquish to the other Party, providing that said other Party continues such payments, its interest in such application and patent and the Invention disclosed therein, subject, however, to retention of a paid-up, non-exclusive, non-assignable license in favor of the relinquishing Party, its parent, and any subsidiary thereof to make, use, lease and sell apparatus and/or methods under said application and patent. 20.4 Each owner of a jointly-owned patent application or patent resulting therefrom shall, provided that it shall have fulfilled its obligation, if any, to pay its share of taxes, annuities, maintenance fees and other charges 64 on such pending application or patent, have the right to grant non-exclusive licenses thereunder and to retain any consideration that it may receive therefor without obligation to account therefor to the other Party. In connection therewith, each of the Parties hereby consents to the granting of such non-exclusive licenses by the other Party and also agrees not to assert any claim with respect to the licensed application or patent against any licensee of the other Party thereunder during the term of any such license. 20.5 No sale or lease hereunder shall convey any license by implication, estoppel or otherwise, under any proprietary or patent rights of Contractor, to practice any process with such product or part, or, for the combination of such product or part with any other product or part. 65 ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS Except as provided in Article 20, neither Party shall acquire any rights with respect to any patent, trademark, trade secret, or any other intellectual property developed or used by the other Party in the performance of this Contract. 66 ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE Proprietary Information shall mean any data and information received by one Party from the other Party, which is identified as proprietary in accordance with either of the following methods: (i) if in writing, it shall be marked by the disclosing Party with an appropriate proprietary legend, or (ii) if disclosed orally, it shall be presented by the disclosing Party as Proprietary at the time of disclosure and shall be confirmed by the disclosing Party as Proprietary Information in writing within fifteen (15) days of its initial oral disclosure. 22.1 The receiving Party agrees to protect such data and information with the same degree of care which the receiving Party uses to protect its own confidential data and information; 22.2 The receiving Party shall not disclose or have disclosed to third Parties, in any manner or form, or otherwise publish such data and information so long as it remains proprietary without the explicit authorization of the other Party or except as otherwise permitted in this Article 22; 22.3 The receiving Party agrees that it shall use such data and information solely in connection with the performance of Work under this Contract, unless otherwise explicitly authorized by or on behalf of the other Party with the designation of specific data and information and use; 22.4 The foregoing obligations with regard to such data and information shall exist unless and until such time as: 22.4.1 Such data and information are to the receiving Party or otherwise publicly available prior to its receipt by the receiving Party 67 without the default of the receiving Party; or 22.4.2 Such data and information have been lawfully disclosed to the receiving Party by a Third Party which has the right to disclose such data; or 22.4.3 Such data and information are shown by written record to have been independently developed by the receiving Party; or 22.4.4 Such data and information are otherwise available in the public domain without breach of this Contract by the receiving Party; or 22.4.5 Such data and information are disclosed by or with the permission of the disclosing Party to a Third Party without restriction; or 22.4.6 Such data and information that a Party may be required by law or government regulation or order to disclose. 22.4.7 Such data and information are released for disclosure in writing by or with the permission of the disclosing Party. 22.5 Providing Buyer shall obtain from the recipient a nondisclosure agreement at least as restrictive as this Article 22, Buyer may disclose any proprietary information on a need to know basis to its customer(s), contractors, insurers, agents, counsel and actual or prospective lenders, investors, or successors in interest. 22.6 Any copyrighted material belonging to a Party to this Contract may be copied by the other Party as necessary to enable the receiving Party to perform its obligations under this Contract, provided always that the 68 copyright legend is retained on the material. 69 ARTICLE 23. PUBLIC RELEASE OF INFORMATION Neither Party shall issue news releases, articles, brochures, advertisements, prepared speeches, and other information releases concerning the work performed or to be performed under this Contract by Contractor or its subcontractors, or any employee or consultant of either, which contains new information not previously disclosed as permitted under the Contract, without first obtaining the prior written approval of the other Party concerning the content and timing of such release which approval shall not be unreasonably withheld. The initiating Party shall provide such releases to the other Party for review within a reasonable time prior to the desired release date and the other Party shall be required to respond within said time period. 70 ARTICLE 24. TAXES 24.1 The price which shall be paid by Buyer for Spacecraft, Documentation and Related Services [****************** *****************] any U.S. (federal, state or local) sales or use taxes, or fees or other U.S. taxes against real or personal property, however designated, which may be levied or assessed against Contractor. Buyer shall be responsible for the payment of all personal property taxes, if any, with regard to goods which are levied upon subsequent to the date of delivery to Buyer. Buyer shall be responsible for any inventory taxes, state taxes or any other taxes that are assessed to Contractor as a result of storage of a Spacecraft in accordance with Article 32. 24.2 In the event Contractor in the performance of this Contract is required to pay non-U.S. customs, import duties, value-added or sales taxes, commercial card fees, port fees, harbor maintenance tax, other charges, or taxes, or fees, (collectively, "Assessments") however designated (except for (i) any Assessment based on Contractor's income and (ii) any Assessment incurred as a result of or associated with Contractor's manufacture of a Spacecraft), then Buyer will reimburse Contractor for such Assessments within thirty (30) days of written notification by Contractor of payment; provided, however that, Contractor shall used its reasonable best efforts to obtain waivers, exemptions and/or relief from such Assessments when practicable, and Buyer shall not be required to pay any Assessment to the extent any such waiver, exemption or relief is pending or has been obtained. Notification shall then be supported by an invoice and attachment(s) evidencing such payment having been made by Contractor. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 71 ARTICLE 25. GOVERNING LAW This Contract shall be deemed made in the State of California and shall be construed in accordance with the laws of the State of California. 72 ARTICLE 26. TITLES Titles given to the Articles herein are inserted only for convenience and are in no way to be construed as part of this Contract or as a limitation of the scope of the particular article to which the title refers. 73 ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES Any notice or request required or desired to be given or made hereunder shall be in writing and shall be effective if delivered in person or sent by mail or by facsimile as indicated below: 1. PanAmSat International Systems, Inc. One Pickwick Plaza Greenwich, Connecticut 06830 Attention: Robert Bednarek, Senior Vice President and Chief Technology Officer cc: Stephen G. Salem, Senior Counsel and cc: Phil Rubin Jim Frownfelter Rubin & Associates 1350 Connecticut Avenue, Suite 610 Washington, DC 20036 Authorized Representative(s): Frederick Landman, President and Chief Executive Officer Robert Bednarek, Senior Vice President and Chief Technology Officer 2. Hughes Space and Communications Company Post Office Box 92919, Airport Station Bldg. S41, M/S A374 Los Angeles, California 90009 Attention: Samuel C. Tricoli, Contracts Manager 74 cc: Bernie Bienstock, Program Manager Authorized Representative(s): Harold McDonnell Vice President or in each case as a Party may direct by notice to the other Party in accordance with this Article 27. 75 ARTICLE 28. INTEGRATION This document, with Exhibits, constitutes the entire understanding between the Parties with respect to the subject matter of this Contract and supersedes all previous oral and/or written negotiations, commitments, and understandings of the Parties (and/or their affiliates), including without limitation that certain Letter Agreement dated as of December 24, 1997, as supplemented by the supplemental letter agreement thereto dated February 9, 1998. 76 ARTICLE 29. CHANGES Subject to Paragraphs 4.2.1 and 5.3 and Article 38: 29.1 Any changes requested by Contractor during the performance of this Contract, within the general scope of this Contract, which will add or delete work, stop work, affect the design of the Spacecraft, change the method of shipment or packing, or the place or time of delivery, or will affect any other requirement of this Contract, shall be submitted in writing ("Change Proposal") to Buyer [********] days prior to the proposed effective date of the change. If such Contractor requested change causes an increase or decrease in the total price or other terms of this Contract, Contractor shall submit a proposal to Buyer detailing the impact of such change. 29.2 Buyer shall notify Contractor in writing within ten (10) days after receipt of the requested change and price adjustment (downward or upward), if any, whether or not it agrees with and accepts such Change Proposal. If Buyer agrees with and accepts the Contractor requested Change Proposal, Contractor shall proceed with the performance of the Contract as changed or in the case of a stop work order, suspend the performance of this Contract, and an amendment to the Contract reflecting the Change Proposal shall be incorporated into the Contract. If Buyer does not agree with the Contractor requested Change Proposal, the Parties shall attempt to reach agreement on such Change Proposal. If the Parties are unable to agree on the requested change and price adjustment, then the Parties shall proceed with the performance of this Contract, as unchanged. In the event the Parties are able to reach agreement on the change, but not on the price adjustment component, then the Parties shall elevate such dispute to the Senior Executives of the respective companies for resolution. If resolution [***] Filed separately with the Commission pursuant to a request for confidential treatment. 77 can not be achieved within a reasonable period of time under the circumstances, Buyer may make a qualified acceptance of the Change Proposal, accepting all matters other than price adjustment, and the issue of price adjustment shall be submitted for resolution by arbitration in accordance with the provisions of Paragraph 33.2 hereof. Pending such resolution of the price issue, the Parties shall perform their obligations under the Contract, or in the case of a Stop work order, suspend their obligations, as if the Change Proposal had been accepted; provided, however, that Buyer shall pay any disputed amount of the price adjustment into an escrow account in accordance with Paragraph 29.4 hereof on the date such amount would have been due and payable had the Change Proposal been accepted, or if the Change Proposal could result in a downward adjustment in the Contract Price in excess of the amount remaining to be paid by the Buyer, Contractor shall deposit the disputed amount of such excess into an escrow account in accordance with Paragraph 29.4 hereof. 29.3 Buyer may submit to Contractor in writing (a "Change Order Request") detailing any changes requested by Buyer during the performance of this Contract, within the general scope of the Contract, which will add or delete work, stop work, affect the design of the Spacecraft, change the method of shipment or packing, or the place or time of delivery, or will affect any other requirement of this Contract. Contractor shall respond to such Change Order Request in writing to Buyer within [*** ****] days after such request. If Contractor determines that the change requested by Buyer is feasible and can be made at no additional cost and with no associated delays, then Contractor shall so notify, Buyer and Contractor shall commence implementing such change. If the Contractor determines otherwise, then, Contractor shall submit to Buyer, a proposal detailing the impact of such change and the price adjustment (downward or upward), if [***] Filed separately with the Commission pursuant to a request for confidential treatment. 78 any, (the "Change Order Offer"). Buyer shall notify Contractor in writing, within ten (10) days after receipt of Contractor's Change Order Offer, whether or not it agrees with and accepts Contractor's Change Order Offer. If Buyer agrees with and accepts Contractor's Change Order Offer, Contractor shall immediately proceed with the performance of the Contract as changed, or in the case of a stop work order, suspend the performance of this Contract, and an amendment to the Contract reflecting such change shall be incorporated into the Contract. If Buyer does not agree with the Contractor's Change Order Offer, the Parties shall attempt to reach agreement on such Change Order Offer. In the event the Parties are able to reach agreement on the change, but not on the price adjustment component, then the Parties shall elevate such dispute to the Senior Executives of the respective companies for resolution. If resolution can not be achieved within a reasonable period of time under the circumstances, Buyer may make a qualified acceptance of the Change Order Offer, accepting all matters other than price, and the issue of price shall be submitted for resolution by arbitration in accordance with the provisions of Paragraph 33.2 hereof. Pending such resolution of the price issue, the Parties shall perform their obligations under the Contract, or in the case of a Stop work order, suspend their obligations, as if the Change Order Offer had been accepted; provided however, that the Buyer shall pay any disputed amount of the price adjustment into an escrow account in accordance with Paragraph 29.4 hereof on the date such amount would have been due and payable had the Change Order Offer been accepted, or if the Change Order Request could result in a downward adjustment in the Contract Price in excess of the amount remaining to be paid by Buyer, Contractor shall deposit the disputed amount of such excess into an escrow account in accordance with Paragraph 29.4 hereof. The dispute shall then be resolved by arbitration under the provisions of Article 33, entitled "Disputes." 79 29.4 Escrow Provisions - Disputed Amounts Disputed amounts with respect to any change under this Article 29 shall be paid into an interest bearing escrow account to be established at Bank of America, Concord, California. Upon settlement of the dispute as to such payment and alleged breach in accordance with Article 33, the Party entitled to the amount or part thereof in escrow, shall receive such amount together with all accrued interest thereon and the other Party shall pay all costs and fees associated with the escrow of said amount. The placement of disputed amounts into an escrow account shall not relieve either Party of its remaining obligations under this contract. 29.5 Determination of Price Adjustment of Change The Parties agree that the change order price adjustment (downward or upward) for any change shall be equal to the sum of (i) the "Change Order Cost" plus (ii) the "Change Order Profit Component". The "Change Order Cost" shall mean those additional or reduced recurring and non-recurring costs to Contractor to implement such change (or which are not required to be implemented), as determined in accordance with Contractor's normal accounting practices, including those general and administrative costs ("G&A Costs") of such change, as determined in accordance with Contractor's normal accounting practices, [*********************************] of Contractor's costs for such change. The "Change Order Profit Component" shall be equal to [**********************] of the Change Order Cost. The Total Change Order Cost shall be payable in accordance with the payment plan agreed by the Parties or, if applicable, by the Arbitrator. Unless otherwise agreed by the Parties, the Change Order Profit Component shall be payable in equal monthly installments at the same time as the monthly installments of Incentives Obligations; provided, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 80 however, that payment of the Change Order Profit Component shall not be conditioned upon performance of the Spacecraft or any component thereof. 29.6 If Contractor makes any improvements to the generic HS-601HP Spacecraft design, then Contractor shall provide reports to Buyer concerning such improvements. Buyer may request that any improvement to the HS-601HP Spacecraft design reported to Buyer be incorporated into the Spacecraft, and such improvements shall be considered a Change and shall be dealt with in accordance with the Change Order process in this Article 29. The foregoing shall not apply to any changes to the generic HS-601HP Spacecraft design, to correct or mitigate the impact of anomalies with respect to such design, made by Contractor on its own accord or as necessary in Contractor's reasonable engineering judgment, which changes shall not relieve Contractor of its obligations to meet the technical specifications for the Spacecraft, as set forth in Exhibit B, hereto. Contractor shall notify Buyer on a periodic basis or as requested by Buyer from time to time of any anomalies with respect to such HS-601HP Spacecraft design. 29.7 The Change Order Price shall be allocated and payable as follows: The Change Order Profit Component shall be an independent payment obligation not contingent upon performance of the Spacecraft and shall be payable at the same time as the monthly installments of the Incentives Obligations for the Spacecraft as set forth in Paragraph 6.3.4 and, in any case, the then-remaining Change Order Profit Component for the Spacecraft shall be paid in full with the last Incentives Obligations Payment. The Total Change Order Cost shall be payable as agreed by the Parties. 81 29.8 To the extent that (i) any change agreed under this Article 29 deletes any Hardware already produced by Contractor, then the provisions of Paragraphs 14.2 and 14.4 shall apply to the disposition of such Hardware. 29.9 The Spacecraft shall be designed to support the Launch Vehicle interface requirements issued by the Launch Vehicle provider (as to Ariane, Proton, Delta and Atlas launch vehicles) existing at the time of the date required of any change in Launch Vehicle designation under Paragraph 4.2.1. If there are any changes to such interface requirements thereafter, then any such change shall be deemed to be a Change Order Request by Buyer, and the Change Order process set forth in Section 29.3 shall apply. 82 ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES For Spacecraft batteries to provide the required minimum fifteen (15) years of in-orbit services per Exhibit B, it is understood that launch must occur within three (3) years from the date of activation of the first battery cell. In the event Buyer directs Contractor to store any deliverable Spacecraft and the period of such storage causes a launch later than three (3) years from the date of activation of that Spacecraft's first battery cell, and Buyer upon its election to either: (i) install replacement batteries or (ii) recondition batteries, so directs Contractor, Buyer shall pay Contractor its costs plus a [***] profit rate. In either case (i) or (ii), the batteries shall meet a fifteen (15) year in-orbit service requirement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 83 ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY 31.1 Prior to the time Buyer and the Contractor enter the Launch Integration Facility and/or Launch Site, they each agree that they will not make a claim against each other for an event that occurs at the Launch Integration Facility and/or Launch Site premises involving damage to, loss of, or loss of use of their property or the property of others in their possession, caused by the fault or negligence of the other Party to this Contract, or otherwise caused by any defect in any product manufactured or sold by the other Party to this Contract. Such claims are waived and each Party will bear its own losses. Buyer will include a comparable clause in each of its contracts with vendors, subcontractors or customers for services or benefits expected as a result of the launch or orbiting of the Spacecraft. Such comparable clause shall include a requirement to flow the clause down to lower-tier contractors. 31.2 Notwithstanding any other provisions of this Contract, prior to the time any Party, associated with launch activities at the Launch Integration Facility and/or Launch Site, shall enter the Launch Integration Facility and/or Launch Site, such Parties shall be required to sign an Inter-Party Waiver of Liability consistent with that between Buyer and the Contractor as incorporated herein under Paragraph 31.1 of this provision or other similar agreement as may be required by the launch agency. Each Party shall have the responsibility to assure that all the Parties associated with the launch of the Spacecraft (for which they have control or privity of Contract with hereunder) have executed said Inter-Party Waiver of Liability. 84 ARTICLE 32. SPACECRAFT STORAGE 32.1 Buyer may, at its option, order Contractor to store, in accordance with the provisions of Exhibit B Spacecraft Specification, the deliverable Spacecraft (including separate storage of Batteries, if needed) for a period of up to two (2) years from the date of their delivery to Buyer. Buyer shall provide written notice to the Contractor not later than six (6) months prior to the scheduled delivery of the Spacecraft. Contractor's price for providing storage shall be provided to Buyer in accordance with Article 29, "Changes," (and such price shall be deemed a "Change Proposal" for purposes of Article 29) within 30 days after receipt of Buyer's notice to store the Spacecraft and Contractor shall provide storage facilities. If such storage facilities are unavailable, Contractor and Buyer shall hold discussions to determine a mutually agreed storage arrangement. 32.2 Six (6) months prior to a stored Spacecraft's scheduled launch date, Buyer shall, by notice in writing, order the Contractor to remove said Spacecraft from storage and ship it to a Launch Site designated by Buyer. 85 ARTICLE 33. DISPUTES 33.1 Disputes 33.1.1 In the event any dispute arises between the Contractor and the Buyer relating to this Contract, either Party may give written notice to the other of its objections and reasons therefore. The Contractor and Buyer shall consult in an effort to reach a mutual agreement to resolve such dispute. In the event a mutual agreement cannot be reached within fifteen (15) days after receipt of this notice, the respective positions of the Parties shall be forwarded to Contractor and Buyer's respective Executive Offices for discussions and they shall attempt to reach a mutual agreement to resolve such dispute within another fifteen (15) day period. 33.2 Arbitration of Disputes 33.2.1 Grounds for Arbitration and Notice Requirement. Any dispute, disagreement, controversy or claim arising out of or relating to this Contract or the interpretation thereof or any arrangements relating thereto, or the validity or enforceability thereof, or contemplated therein or the breach, termination or invalidity thereof which is not settled to the mutual satisfaction of the Parties in accordance with Paragraph 33.1 above, then it shall be settled exclusively and finally by binding arbitration, after written notice by either Party. Arbitration of such disputes in accordance with this Article 33 shall be the Parties' exclusive remedy. 86 33.2.2 Administration and Rules. Arbitration proceedings in connection with the Contract shall be administered by the American Arbitration Association in accordance with its then in effect Commercial Arbitration Rules, together with any relevant supplemental rules including but not limited to its Supplementary Procedures for Large, Complex Disputes, as modified by the terms and conditions of the Contract. With respect to the selection of arbitrators, arbitration proceedings in connection with this Contract shall be conducted before a panel of three (3) arbitrators. Within fifteen (15) days after the commencement of arbitration, each Party shall select from a list of qualified persons one person to serve as an arbitrator on the panel, and within ten (10) days of their selection, the two arbitrators shall select a third arbitrator who is listed as an active member of the American Arbitration Association at the time that arbitration proceedings commence. If the two arbitrators selected by the respective Parties are unable or fail to agree upon the third arbitrator in the allotted time, then the third arbitrator shall be selected by the American Arbitration Association. 33.2.3 Place of Arbitration. The place of arbitration shall be in Los Angeles, California, U.S.A. 33.2.4 Discovery. The arbitrators shall have the discretion to order a pre-hearing exchange of information by the Parties, including without limitation, production of requested documents, exchange of summaries of testimony of proposed witnesses, and examination by deposition of the Parties. 33.2.5 Award and Judgment. The arbitrators shall have no authority to 87 award punitive damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Contract. Subject to the foregoing, the Parties agree that the judgment of the arbitrators shall be final and binding upon the Parties and that the judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 33.2.6 Confidentiality. No Party or arbitrator may disclose the existence, content, or results of any arbitration proceedings in connections with this Contract without prior written consent of all Parties to the arbitration proceeding. 33.2.7 Fee and Expenses. All fees and expenses of any arbitration proceedings in connection with this Contract shall be borne by the losing Party. However, each Party shall bear the expense of its own counsel, experts, witnesses, and preparation and presentation of evidence. 33.2.8 Performance. Contractor and Buyer shall continue with performance under this Contract during any disagreement, negotiation, or arbitration. 88 ARTICLE 34. ASSIGNMENT 34.1 Neither Party shall assign, or transfer this Contract or any of its rights, duties or obligations thereunder to any person or entity, in whole or part without the prior written consent of the other Party except that either Party may assign or transfer any of its rights, duties or obligations under this Contract, either in whole or in part, to its parent company, subsidiary or affiliate.1 In addition, notwithstanding anything in this Article 34 to the contrary, the consent of Contractor shall not be required for, and Paragraph 34.2 shall not apply to any assignment by Buyer of its rights, duties and/or obligations hereunder as security for any indebtedness of Buyer or its subsidiaries or affiliates. Neither Party shall unreasonably withhold consent to any assignment or transfer providing that the requesting Party can demonstrate to the other Party's satisfaction that: (1) its successor or assignee possesses the financial resources to fulfill the obligations of this Contract; and (2) any such assignment or transfer shall not jeopardize any data rights or competitive position, or violate laws related to export or technology transfer, or otherwise increase the other Party's risks or obligations. If the requesting Party cannot so demonstrate, both Parties agree to negotiate in good faith suitable modifications and new provisions to this Contract which would mitigate the above risks and/or bring this Contract into conformance with applicable laws. 1 Affiliate: An "affiliate" of, or a person "affiliated" with, a specified person, is a person 89 that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. 34.2 The Parties agree that in the event that the ownership or control of Buyer or Contractor is changed, the Parties reserve the right to negotiate in good faith suitable modifications and new provisions to this Contract which would mitigate any additional risks, financial or otherwise, which may be brought about by such change in ownership or control. 34.3 This Contract shall be binding upon the Parties hereto and their successors and permitted assigns. 90 ARTICLE 35. LIMITATION OF LIABILITY 35.1 The Parties to this Contract expressly recognize that commercial space ventures involve substantial risks and recognize the commercial need to define, apportion and limit contractually such risks associated with this commercial space venture. The payments and other remedies expressly set forth in this Contract fully reflect the Parties' negotiations, intentions and bargained-for allocation of such risks associated with commercial space ventures. 35.2 In no event shall the Parties be liable for any direct, indirect, incidental, special, contingent or consequential damages (including, but not limited to, lost revenues or profits), except as expressly provided for in this Contract. This Article shall survive the expiration or termination of this Contract for whatever cause. 91 ARTICLE 36. NO THIRD PARTY AGREEMENT OR RIGHTS 36.1 Contractor represents and warrants that: (i) Contractor has terminated the agreement between Contractor and a third party for construction and delivery of the spacecraft (the "Base Spacecraft") from which PAS 6B will now be built; and (ii) neither Contractor nor such third party have any continuing rights or obligations with respect to PAS 6B or the Base Spacecraft (or otherwise arising under such terminated agreement). Contractor agrees to indemnify Buyer for, and hold Buyer harmless from, any and all liability, loss, claim or damage to which Buyer or its affiliates (or any director, officer, employee or agent of Buyer or one of its affiliates) may become subject, arising from any claim by such third party or any breach of the representations and warranties made by Contractor in this Article 36. 36.2 The provisions of this Contract are for the benefit of only the parties hereto, and no third party may seek to enforce, or benefit from, the terms and conditions of this Contract, other than as expressly provided in the immediately following sentence. The parties agree and acknowledge that (i) the first two sentences of Paragraph 14.4, and Contractor's obligation to make payment to Buyer in the event that Buyer accepts Contractor's proposal as provided in such Paragraph 14.4, are for the benefit of Buyer and of Buyer's customers NetSat ServiAos Ltda. ("NetSat") and Multi-Country Partners GP ("Multi-Country") and (ii) each of NetSat and Multi-Country shall have the right to enforce, as a third party beneficiary, the obligations of Contractor under the first two sentences of Paragraph 14.4, and Contractor's obligation to make payment to Buyer in the event that Buyer accepts Contractor's proposal as provided in such Paragraph 14.4, directly against Contractor, either in an action brought solely by such party or in a joint action with each other and/or with Buyer. 92 36.3 This Article 36 shall survive delivery of the Spacecraft and the Documentation, the performance of the Related Services and any termination of this Contract. 93 ARTICLE 37. LIQUIDATED DAMAGES FOR LATE PERFORMANCE 37.1 In the event that the launch of the Spacecraft is delayed due to the fault of Contractor (and/or Contractor's subcontractors or suppliers) or the Spacecraft is not shipped on or prior to the Shipment Date in accordance with the requirements of this Contract and the Exhibits hereto, Contractor shall pay to Buyer liquidated damages as follows: 37.1.1 For [************************] of delay, Contractor shall [**************************] 37.1.2 For the next [**************] of delay, Contractor shall [********************************************** ***************************************************** ******************************] 37.2 Contractor shall pay to Buyer the liquidated damages owed pursuant to Paragraphs 37.1 within thirty (30) days of invoice from Buyer. 37.3 The Parties understand and agree that the liquidated damages provided under this Article 37 shall be in lieu of all other remedies of any kind except for Buyer's rights and remedies under Articles 11 and 14. The amounts presented in Paragraph 37.1 shall constitute liquidated damages for such late shipment and shall not constitute a penalty. The Parties acknowledge and agree that such liquidated damages are believed to represent a genuine estimate of the losses that would be suffered by reason of any such delay (which losses would be difficult or impossible to calculate with certainty). [***] Filed separately with the Commission pursuant to a request for confidential treatment. 94 ARTICLE 38. CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES 38.1 Without limiting the obligations of Contractor under other provisions of this Contract, if the data available from another satellite manufactured or under manufacture or design by Contractor (a "Contractor Satellite") indicates that there is or may be a material deficiency in the design or manufacture of such Contractor Satellite which, in the reasonable opinion of Contractor, will or may adversely affect the Spacecraft produced under this Contract, or the operations of such Spacecraft, then Contractor shall notify Buyer of such any such material deficiency. Contractor shall promptly take appropriate corrective measures, at Contractor's expense, with respect to the Spacecraft so as to satisfactorily eliminate from such Spacecraft prior to its shipment all the material deficiencies discovered in Contractor Satellite(s), subject to the provisions of Paragraph 38.5. 38.2 In the event that the corrective measures performed pursuant to this Article 38 cause a delay, then: (i) Contractor shall [***************** ****************************] in accordance with Paragraph 4.1; (ii) the time periods provided in Paragraph 5.5 and 37.1 [*************** ********] and (iii) Buyer and Contractor shall discuss the impact (if any) to the construction and delivery of the Spacecraft. 38.3 If Contractor, in performing corrective measures in accordance with this Article 38, replaces any equipment or part determined to be deficient, such deficient equipment or part shall remain or become the property of Contractor. 38.4 Contractor shall disclose to Buyer sufficient technical and operational information regarding a material deficiency [******************* *********] to enable Buyer to make an informed decision regarding the taking of corrective measures. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 95 Notwithstanding the foregoing, Contractor shall not be obligated by this Article 38 to disclose the identity (or any identifying information) of any such satellite, or the owners or customers of such Contractor Satellite, on which a material deficiency is discovered. 38.5 Contractor shall be obligated to notify Buyer if Contractor proposes to resolve technical deficiencies (arising during the design and/or manufacturing process of the Spacecraft) through the imposition of operational constraints. The Parties agree promptly to enter into good faith negotiations to resolve any such deficiency and, if appropriate, agree to adjust equitably the Contract Price and/or schedule, subject to Paragraph 38.2. In the event that the Parties cannot reach an agreement within five (5) business days as to the resolution of such deficiency or its adjustment (if any) to Contract Price and/or schedule, then the unresolved issues shall be submitted to the Contractor's and Buyer's senior executives for resolution. If such senior executives cannot reach agreement within ten (10) business days thereafter, then the remaining unresolved issues shall be submitted for resolution by arbitration pursuant to Paragraph 33.2. 96 ARTICLE 39. REPLACEMENT SPACECRAFT 39.1 Buyer shall have the right to purchase a replacement spacecraft ("PAS 6C") for PAS 6B in the event that PAS 6B suffers a launch failure (including any total or constructive total loss that occurs prior to the placement of PAS 6B into commercial operations). PAS 6C shall have substantially the same configuration and performance of PAS 6B. If Buyer orders PAS 6C, the price for such spacecraft (and its Related Services and Documentation) shall [******************************* ***********************] which shall include as a baseline launch on an Ariane Launch Vehicle, and Contractor shall construct and deliver PAS 6C and Documentation, and shall perform the required Related Services, to support a launch of PAS 6C within twelve (12) months from written direction from Buyer for the order of PAS 6C. Except as expressly specified in this Article, the terms and conditions of this Contract shall apply in context to PAS 6C if ordered under this Article. PAS 6C may be ordered at any time through one hundred twenty (120) days after the launch of PAS 6B. Attached as Exhibit H hereto is a payment plan for PAS 6C based upon a price of [*************] 39.2 In order to have the right to order PAS 6C in accordance with Paragraph 39.1, Buyer shall direct Contractor to purchase long lead items for PAS 6C by written notice to Contractor no later than April 20, 1998; provided, that if, prior to April 20, 1998, the Launch Date has been revised from October 20, 1998 in accordance with the terms of this Contract, then such written notice shall be required no later than six (6) months prior to such revised Launch Date. If Buyer provides such written notice, then Contractor shall purchase long lead items and take such other steps as may be required to enable Contractor to have PAS 6C ready to be launched within twelve (12) months of the PAS 6B launch failure. The price for the long lead items shall be [************** **********************] payable [***] Filed separately with the Commission pursuant to a request for confidential treatment. 97 in accordance with the following payment schedule: [***********] [**********************************] -------------------------------------------------- [*****] [****] [**********] -------------------------------------------------- [*] [***] -------------------------------------------------- [*] [***] -------------------------------------------------- [*] [***] -------------------------------------------------- [*] [***] -------------------------------------------------- [*] [***] -------------------------------------------------- [*] [***] -------------------------------------------------- 39.3 If Buyer has purchased long lead items in accordance with Paragraph 39.2, then, within one hundred twenty (120) days of the successful launch of PAS 6B, Buyer shall direct disposition of such long lead items either: (a) to build PAS 6C at the same price for launch within twelve (12) months of such direction; or (b) direct the disposition of such long lead items pursuant to Paragraphs 14.2 and 14.5. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 98 ARTICLE 40. INDEX OF DEFINED TERMS Each of the following capitalized terms has the meaning ascribed to such term in the applicable Paragraph. ---------------------------------------------------------- Defined Terms Paragraph ---------------------------------------------------------- Affiliate 34 ---------------------------------------------------------- Assessments 24.2 ---------------------------------------------------------- Authorized Representations 27 ---------------------------------------------------------- Base Spacecraft 36 ---------------------------------------------------------- Buyer Introduction ---------------------------------------------------------- Buyer-Furnished Item 8.1 ---------------------------------------------------------- Calculated Operational 6.3.1.5 Lifetime ---------------------------------------------------------- Certain Documentation Exhibit E ---------------------------------------------------------- Change Order Cost 29.5 ---------------------------------------------------------- Change Order Offer 29.3 ---------------------------------------------------------- Change Order Profit Component 29.5 ---------------------------------------------------------- Change Order Request 29.3 ---------------------------------------------------------- Change Proposal 29.1 ---------------------------------------------------------- Contract Introduction ---------------------------------------------------------- Contract Price 5.1 ---------------------------------------------------------- Contractor Introduction ---------------------------------------------------------- Contractor Satellite 38.1 ---------------------------------------------------------- Costs 14.5 ---------------------------------------------------------- Degraded Payload 6.3.2.3 ---------------------------------------------------------- Delinquent Payments 6.4 ---------------------------------------------------------- 99 ---------------------------------------------------------- Deliverables 3 ---------------------------------------------------------- Documentation 4.1 ---------------------------------------------------------- Effective Date 39 ---------------------------------------------------------- Extension Period 6.3.4.3 ---------------------------------------------------------- G&A Costs 29.5 ---------------------------------------------------------- Holdback Amount 12.5 ---------------------------------------------------------- Incentives Interest Rate 6.3.2.2 ---------------------------------------------------------- Intentional Ignition 16.2 ---------------------------------------------------------- Launch Date 7.1.1 ---------------------------------------------------------- Launch Vehicle 4.2.1 ---------------------------------------------------------- Launch Window 7.1.2 ---------------------------------------------------------- Letter Agreement Recitals ---------------------------------------------------------- LOPS/MOPS Option 6.3.4.3 ---------------------------------------------------------- LOPS/MOPS Refund 6.3.4.3 ---------------------------------------------------------- MCC 3.3(a) ---------------------------------------------------------- OCC 3.3(b) ---------------------------------------------------------- PAS 6B 3.1 ---------------------------------------------------------- Pre-Launch Incentive Payments 6.3.4.1 ---------------------------------------------------------- Program Invention 20.1 ---------------------------------------------------------- Properly Operated 3.4 ---------------------------------------------------------- Recoverable Amount 6.3.4.4 ---------------------------------------------------------- Related Services 4.1 ---------------------------------------------------------- Risk of Loss 15.1.4 ---------------------------------------------------------- Shipment Date 4.1 ---------------------------------------------------------- Spacecraft 3.1 ---------------------------------------------------------- 100 ---------------------------------------------------------- Spacecraft Retirement Payment 6.3.3 ---------------------------------------------------------- Specified Operational 6.3.1.1 Lifetime ---------------------------------------------------------- Successfully Injected 6.3.1.5 Spacecraft ---------------------------------------------------------- Successfully Operating 6.3.1.2 Payload ---------------------------------------------------------- Successfully Operating 6.3.1.3 Transponder ---------------------------------------------------------- Third Anniversary 6.3.4.3 ---------------------------------------------------------- Useful Commercial Life 6.3.1.4 ---------------------------------------------------------- Warranty Time Period 16.2 ---------------------------------------------------------- 101 ARTICLE 41. EFFECTIVE DATE OF CONTRACT The "Effective Date" of this Amended and Restated Contract No. 98-PAS-001 shall be 9 March 1998. 102 IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated Contract No. 98-PAS-001 to become effective upon the date specified in Article 39, herein entitled, "Effective Date of Contract." HUGHES SPACE & COMMUNICATIONS COMPANY SIGNATURE: /s/ Michael J. Houterman --------------------------------- NAME: Michael J. Houterman -------------------------------------- TITLE: VP HSC ------------------------------------- DATE: March 9, 1998 -------------------------------------- PANAMSAT INTERNATIONAL SYSTEMS, INC. SIGNATURE: /s/ Frederick Landman --------------------------------- NAME: Frederick Landman -------------------------------------- TITLE: President & Chief Executive Officer ------------------------------------- DATE: March 9, 1998 -------------------------------------- EX-10 14 EXHIBIT 10.52 Exhibit 10.52 EXECUTION COPY TRANSPONDER SERVICE AGREEMENT This Agreement (the "Agreement") is entered into this 5th day of March, 1998 (the "Execution Date"), by and between PanAmSat International Systems, Inc., a Delaware corporation formerly known as PanAmSat Corporation ("PanAmSat") and Sky Multi-Country Partners, a Delaware partnership, previously referenced as Multi-Country Partners GP ("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 Ku-band transponders. As more particularly described in Article 2 below, the Service has been (pursuant to the "Letter Agreement," as defined below) and shall be provided, during specified periods from various combinations of eight (8) Transponders, four (4) in the SSA Beam and four (4) in the NSA Beam, each as identified in Appendix C, of that certain Atlantic Ocean Region Satellite referred to by the parties as PAS-3, aka PAS-3R ("PAS-3") that was constructed by Hughes Space and Communications Company, formerly a division of Hughes Aircraft Company ("Hughes"), launched, and placed into commercial service on February 20, 1996; twenty-four (24) Transponders, twelve (12) in the NTSC Beam and twelve (12) in the Argentina Beam of that certain Atlantic Ocean Region Satellite referred to by the parties as PAS-6 ("PAS-6") that was constructed by Space Systems/Loral, Inc. ("Loral") launched, and placed into commercial operation on September 19, 1997; and sixteen (16) Transponders in the Latin Beam of that certain Atlantic Ocean Region Satellite referred to by the parties as PAS-6B ("PAS-6B"). PAS-6B is now under construction by Hughes. The Transponders used to provide Customer with Service are referred in this Agreement as the "Service Transponders." The Service Transponders are more particularly identified in Appendix A and each satellite (generally referred to as a "Satellite") is described in Appendix B (one for each Satellite) of this Agreement. References in this Agreement to the "Primary Satellite" means PAS-6 before the PAS-6B "Service Date" (under and as defined in this Agreement) and PAS-6B on and after the PAS-6B Service Date under this Agreement. For the avoidance of doubt, if there is never a PAS-6B Service Date or if there is one, but it is negated under the provisions of Section 2.2(f) ("Condition Subsequent to PAS-6B Service Date") below, the Primary Satellite shall remain PAS-6. The Service shall be supplied by PanAmSat in outerspace. The transponders on each Satellite and the beams in which these transponders are grouped are referred to as "Transponder(s)" and the "Beam(s)," respectively. 1 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 acknowledge and agree that the combination of this Agreement and that certain "Second Amended and Restated Transponder Purchase and Sale Agreement," by and between PanAmSat and NetSat Servicos Ltda., a Brazilian limited liability quota company ("NetSat") dated the same day as this Agreement (the "Brazil Agreement") supersedes the Letter Agreement as to PAS-3 and PAS-6 and the rights and obligations of the parties relative thereto, but that the rights and obligations of the parties to the Letter Agreement relative to PAS-5 are unaffected and remain binding. Further, the parties acknowledge and agree that the negotiation of this Agreement and the Brazil Agreement have responded to special circumstances regarding the [*******************] of PAS-6 that are not relevant to PAS-5 and that it is neither anticipated nor required that the rights and obligations of the parties to the Letter Agreement vis-a-vis PAS-5 (said rights and obligations, as the same may now or in the future be amended or documented, are referred to herein as the "Mexico Agreement" and references to the customer thereunder are referred to herein as the "Mexico Platform") will reflect this Agreement or the Brazil Agreement. References in this Agreement to NetSat also refers to any permitted assignees of its rights under the Brazil Agreement. For the avoidance of doubt, any PAS-3 Transponder that may be made available by Televisa to Customer under separate sublease arrangement shall not constitute a Service Transponder hereunder. 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, COVENANTS ON USE. 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. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 2 1.2 Intentionally deleted. 1.3 Beam Switching on PAS-3. Certain of the Customer's Transponders on PAS-3 are designed to be capable of operation from different uplink Beams. The current configuration of the NSA Beam Transponders from which Service is provided to Customer in [*******] (as defined below) of this Agreement and [*****************************************************] the planned configuration of the SSA Transponder [**********************************] is shown in Appendix A. Upon Customer's written request, subject to PanAmSat's consent not to be unreasonably withheld, including, without limitation, for reasons of actual or potential interference to existing satellites, satellites that are under construction and/or notified or subject to other application to the FCC or the ITU, or use by other customers, PanAmSat will, if required, but not to be on a frequent basis, make additional changes to the uplink Beam of these switchable Transponders; provided as follows: (a) if the change cannot be accomplished using reasonable engineering standards, this Agreement shall continue to operate with the Service Transponders' in their then-existing configuration, as if the request for a change had not been made; (b) if Customer requested the change in order to replace Service from a Service Transponder to be uplinked from a location which was lost because of a failure of another Service Transponder to meet the Service Specifications, in circumstances in which such other Service Transponder could not be restored with "Spare Equipment" or "Substitute Capacity," as defined in Section 5.3, PanAmSat shall bear the risk of loss if the Service Transponder(s) is damaged or made unusable as a result of attempting to make the change (i.e., if the Service Specifications for such Transponder can no longer be met, the provisions of this Agreement that apply to a failure of a Service Transponder on a Confirmed Basis shall apply); and (c) except as provided in the preceding clause (b), Customer shall accept the risk of loss if a Service Transponder(s) is damaged or made unusable as a result of attempting to make the switch (i.e., the Service Transponder shall not be deemed to have failed on a Confirmed Basis). 1.3A Beam Switching on PAS-6B. Certain of the Customer's Transponders on PAS-6B may be capable of operation in the Brazil downlink Beam. Upon Customer's written request, subject to PanAmSat's consent not to be unreasonably withheld, including, without limitation, for reasons of actual or potential interference to existing satellites, satellites that are under construction and/or notified or subject to other application to the FCC or the ITU, or use by other [***] Filed separately with the Commission pursuant to a request for confidential treatment. 3 customers, PanAmSat will, if required, but not to be on a frequent basis, change the downlink Beam of such switchable Transponders (if any) to the Brazil Beam; provided as follows: (a) if the change cannot be accomplished using reasonable engineering standards, this Agreement shall continue to operate with the Customer's Transponders in their then-existing configuration, as if the request for a change had not been made; (b) Customer shall accept the risk of loss if the Customer's Transponder(s) is damaged or made unusable as a result of attempting to make the switch (i.e., the Customer's Transponder shall not be deemed to have failed on a Confirmed Basis); (c) the Transponder(s) being switched shall continue to count toward Customer's Minimum Complement; (d) for purposes of [**************************] hereunder, any switched Transponder during the period of its switch shall be treated as a "Non-DTH Transponder" (as defined below); and (e) [*********] must consent to such switch. 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 via "Ku-band" satellite 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 predominately Spanish speaking countries of South America and Central America except for the following: the Dominican Republic, Costa Rica, Cuba, Guatemala, Nicaragua, Honduras, El Salvador, Panama, Puerto Rico, and other islands in the Caribbean that are located in whole or in part [***] Filed separately with the Commission pursuant to a request for confidential treatment. 4 north of 12(degree) North Latitude. The foregoing notwithstanding, if this Agreement is terminated as to both the PAS-6 NTSC Beam and the PAS-6B Satellite in its entirety, the "Territory" shall be limited to Chile, Argentina, Uruguay and Paraguay (the "Southern Part of the Continent") and if this Agreement is terminated on the Argentina Beam of PAS-6 and the PAS-6B Satellite in its entirety, the Territory shall cease to include said Southern Part of the Continent, the remaining Territory being referred to herein as the "Northern Part of the Continent." As used in this Agreement, "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, Globo, Tele-Communications International, Inc. ("TINTA"), and/or any of the "Approved Companies" that are identified in Appendix I. News, Televisa, and Globo are also referred to herein as the "Founding Partners." In addition, TINTA may elect, pursuant to Section 18.4 hereof, on notice to PanAmSat to be given no later than the date that is sixty (60) days after the Execution Date, 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 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, 5 "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, MMDS and other facilities that may be developed for the distribution of video programming ("Non-DTH Outlets"), provided as follows: [****************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *************************************************************] 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 distributors [****************************************************************** *******************************************************************************] 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 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 6 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 (subject to Section 18.4 as to TINTA) 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 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, [****************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *****************************************] provided that, it is acknowledged and agreed that during "Phase 1" (as defined below) Customer and the Customer Companies were permitted to use capacity on PAS-3 for satellite newsgathering purposes, under the [*********************************************************** ******************************************************************************** *********] 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. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 7 (d) Use by Others. In any circumstances in which Customer is permitted herein 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(s), 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 not to allow Customer to resell or otherwise make the Service Transponder(s) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 8 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(s) (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 no such marketing shall occur in "Phase 2" (as defined below) and thereafter 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 potential customers for video, data, or other uses, as market demand and technical considerations may warrant, as reasonably determined by PanAmSat in consultation [***] Filed separately with the Commission pursuant to a request for confidential treatment. 9 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) During Phase 1, Customer's [************************* ******************************************************************************** *************************************************************************] Thereafter, subject to Sections 1.7 and 1.8 below, the [*******************] for any Service Transponders that are 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 Phase 1, 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 Phase 1, 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 for other PanAmSat capacity, PanAmSat shall not be required to discontinue such negotiations; and [***] Filed separately with the Commission pursuant to a request for confidential treatment. 10 (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, or, in [**************] (as defined below), either the Southern Part of the Continent or the Northern Part of the Continent, with no plan to reenter DTH Service market in the Territory (or Northern or Southern Part of the Continent, as applicable) on any such basis, then (subject to Section 1.7A) the following shall occur: [***] Filed separately with the Commission pursuant to a request for confidential treatment. 11 (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 [***************************************************** ************************] applicable 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) the [*************************************************] per Service Transponder and the then [**********************************************************] 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. 1.7A Limitation to Part of the Continent. In [*************] if Customer's cessation of business, as described in Section 1.7, is limited to the Northern or the Southern Part of the Continent, then clauses (i) through (v) of Section 1.7 shall apply only to Customer's Transponders in NTSC or Argentina Beams of PAS-6, as [***] Filed separately with the Commission pursuant to a request for confidential treatment. 12 applicable, plus any retained Transponders on the "Comparable Beam," as defined below, of PAS-3). 1.8 [************] (a) General Obligations. (i) PanAmSat. Subject to the exceptions stated in this Section 1.8, PanAmSat agrees that, during the "Term" of this Agreement (as defined 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 (x) which is owned, operated or managed by PanAmSat or any PanAmSat Company, (y) which is located in the [*********************************] (defined herein to be the [*********************] at which the Primary Satellite is [*******************************] and (z) which 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 [***********] or (B) [********] its [**********] for any satellite located in the [*******************************************] unless the assignee agrees to be bound by the provisions of the previous clause (A). 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, 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 [********************] (such as the Ku-band Transponders on PAS-6 that are being provided to [*************************************************] but that may have [********************] (in terms of [***************] for DTH service) over a [******************] of [***************]). For the avoidance of doubt, none of the restrictions on PanAmSat or any PanAmSat Company that are stated in this [***] Filed separately with the Commission pursuant to a request for confidential treatment. 13 Section 1.8 shall apply to any satellite that is not located in the Primary Satellite Orbital Slot. (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 [************************************] are applied; or (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 [*********] or their DTH Services; (B) PanAmSat or a PanAmSat Company from making an investment in Customer, a Customer Company, or in Customer's DTH Service; (C) Customer or any Customer Company from making an investment in PanAmSat or a PanAmSat Company; nor (D) during either Phase 2 or Phase 3A (as defined below), Customer from [************************************ ***************************] (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 any [***] of the following circumstances: (i) Customer is using [***] of the [*********] provided hereunder for the [**************] DTH Service, (B) 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 (C) PanAmSat is [***********] to make such [**********************] available, at agreed [***] Filed separately with the Commission pursuant to a request for confidential treatment. 14 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 (D) 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; or (ii) At Customer's option, if this Agreement is terminated as to PAS-6B without the occurrence of a PAS-6B Service Date or upon the occurrence of the PAS-6B Service Date. (c) Intentionally Deleted. (d) [********************************] At Customer's option, provisions of this Section 1.8 shall [*************] to a [**********************] on and after 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 [**************************************************************** *******************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 15 ******] 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 receiving such notice or notice of an event that would permit a party to [*************] the [****************] of this Section 1.8 in relevant part, 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). (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) [************************************] The obligations specified in this Section 1.8 shall [******] at such time that this Agreement is [****************] as to [*************] and [**********] even if this Agreement [***********] in [**********] for PAS-3 Transponders. (i)(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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 16 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, PHASES OF SERVICES, SERVICE TERMS, DEGRADED SERVICE 2.1 Term, Service Term. The term of this Agreement (the "Term") is acknowledged to have commenced as of February 20, 1996 and, unless previously terminated in accordance with the provisions of this Agreement, shall, subject to Section 16.1(f), remain effective until the latest to end of the "Service Term" for PAS-3, PAS-6 and PAS-6B (if any). General references to the "Service Term" of this Agreement shall mean the period from February 20, 1996 (the "PAS-3 Service Date") to the end of Service Term for all Satellites from which Service is provided under this Agreement. The date that Service is commenced from a particular Satellite is referred to in this Agreement as the "Service Date" for that Satellite; unless otherwise specified, references in this Agreement to the "Service Date" means the PAS-3 Service Date. Subject to Section 2.4 below, any Service Transponder that does not meet the Service Specifications at the time that the Service Date occurs for one or more other Service Transponders on the same Satellite shall at that time cease to be a Service Transponder or subject to this Agreement. For the avoidance of doubt, the anticipated lifetime of a Satellite shall not be considered for purposes of determining whether the Service Specifications are being met. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 17 2.2 Phases of Service. (a) [*************]. It is acknowledged and agreed that from the PAS-3 Service Date until, but not including, [*******************************************************] (said period being referred to herein as [***********] Customer was provided with Service from four (4) SSA Beam and four (4) NSA Beam Transponders on PAS-3. (b) [************************] The period from the [***********************] until the earlier of: (i) the [*********************** *********] (as defined below) or (ii) the date that this Agreement is terminated as to [*********] without the occurrence of the [***********************] is defined herein as [**************] During [*******] (i) Subject to the further qualifications set forth in this Section 2.2(b) below, PanAmSat shall provide Customer with Service from the [**********************************************] (as designated in Appendix A) (which Service during [*********] shall, up to the [******************************************************************** ************************************************] such number of [*****************] and [********************] Transponders as [*************************] provided that, if [*********** *******************************] Transponders from which Customer shall take Service from PanAmSat during this period shall be [***************************** ********************************] as long as [********************] of Customer's Transponders collectively on PAS-3 and PAS-6 meet their respective Performance Specifications. For the avoidance of doubt, any Transponders subleased by Customer from Televisa shall not count toward the Minimum Take. (ii) Customer is currently using the following [********************************************************************* **********************] Customer shall notify PanAmSat prior to employing any additional [**********************************************] which notice shall specify what additional [******************] will be employed, it being understood that prior to such notice PanAmSat may elect to keep such [****************************************************************] At any time that Customer exceeds its [*************************************************] the [**************] of [*********************************] shall, subject to the qualifications set forth below, thereafter become the [******************], subject to further increase if additional [************************] are [*******************] by Customer. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 18 (iii) Customer may, on notice to PanAmSat, [**********] its [*********************] in any of the following circumstances set forth below, provided that Customer and [*****************] as much of the [************************] to them by [*************************************] as may be [******] without reaching any of the thresholds specified in these provisions: (A) the number of [***************** **********] on PAS-6, with [**************************************************** ****] is[***************************************] at the time of all of the [****************************] that are then employed by Customer and [*********] (B) there is not the equivalent of at least [************************] each for the [*************************************************] or (C) the number of [***************** ***********] reasonably projected to meet their applicable [******************** ***************************] for at least [***********************] following the date on which PAS-6B is scheduled to commence commercial operation [**************] the [********************************************************** *********************************************] of Customer and [*******]. Customer shall not be permitted to [***********************] of [*****************] from which it takes Service in circumstances where (i) it would, when [**********] with [***************] of [*********], exceed the then {*****************************] for [***************************], or (ii) if it would allow [********] to [***********] its [********************] under {****************************] of its Agreement, subject, however, to [********] right to waive such [***************] in its [*******************] (iv) Customer shall [***************************] Service from the one "Retained SSA Transponder" (as designated 2-K in Appendix A) [**************************************************************************]. Customer acknowledges being advised that [*********************************] in connection with the operation of the SSA Transponder. [**] Customer [****************************], if not in use at the time and if technically feasible, PanAmSat will [******************************************************* ******************************************************************************** *************************************************************************] Customer [************************] its overall [**************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 19 ******] requirements shall be [******************] from its number immediately prior to said exercise. (v) PanAmSat shall report to Customer monthly on the number of [********************] available, the number of [********************* ***********************] into the [****************************************] and the number of [*******************************************] projected to meet their applicable [**********************************************************] for at least [**********************] following the date on which PAS-6B is scheduled to go into commercial operation, and shall notify Customer within forty-eight (48) hours of any reported [********************] (c) [**************************************************] From the [***************************] and for the remaining Service Term of PAS-6B [***********************************************] Customer will be provided with Service from [**************] PAS-6B Latin Beam Transponders. In addition for the first [****************] days of [*********] (the "Dual Illumination Period"), Customer shall be permitted to use any PAS-3 Transponder and, if technically feasible, PAS-6 Transponder from which Customer had been taking Service from prior to the launch of PAS-6B. In addition, Customer shall be permitted to extend the Dual Illumination Period for one PAS-3 NSA Transponder and, if employed prior to the launch of PAS-6B, the Retained SSA Transponder, for an additional [*******************] for a total of [******************] dual illumination, if required for Customer's home page (the "Home Page Transponder(s)"). Customer shall notify PanAmSat no later than [*****************] after the PAS-6B Service Date if Customer will require said additional time for the trade-in of Customer's Home Page Transponder(s) and which PAS-3 Transponder(s) Customer desires to use for this purpose. The foregoing notwithstanding, during the Dual Illumination Period, for purposes of Service Fee calculations, the maximum number of PAS-3, PAS-6 and PAS-6B Transponders from which Customer shall be deemed to be taking Service shall be [******************] plus any [********************************] that Customer may have agreed [***************************************************] (d) Interference Between PAS-6 and PAS-6B. Customer acknowledges and agrees that its Transponders on PAS-6B cannot be used at the same time as the Transponders of the same frequency on PAS-6 while the Satellites are located in the same orbital slot and that, during the Dual Illumination Period, Customer shall not be entitled to any remedy for any interference that may be [***] Filed separately with the Commission pursuant to a request for confidential treatment. 20 suffered to the Customer's Transponders due to the co-frequency operation of Transponders on PAS-6 and PAS-6B by Customer or NetSat. (e) PAS-6B Service Date. The PAS-6B Service Date shall be the date that PAS-6B has been placed in its assigned orbital position, with at least the "Minimum Complement" of PAS-6B Service Transponders meeting the "Service Specifications" set forth in Appendix C and PanAmSat so certifies to Customer and makes such Transponders available to Customer for its use, unless, Customer agrees to accept Service from fewer PAS-6B Service Transponders than the Minimum Complement (which fewer number would then be deemed the Minimum Complement for PAS-6B hereunder); provided that if Customer exercises the "PAS-3 Phase 3 Option" (defined below), the number of PAS-3 Transponders as to which the Option is exercised that meet their Service Specifications shall be counted toward the Minimum Complement for PAS-6B. The foregoing notwithstanding, if PanAmSat is unable initially to provide Service (i.e., at the PAS-6B Service Date) from the Minimum Complement of PAS-6B Service Transponders, PanAmSat will not be required to offer Service to Customer from a fewer number of PAS-6B Service Transponders, if less than the number of PAS-6 Service Transponders that then currently are capable of meeting their Service Specifications. PanAmSat shall give the certification to Customer required for Service to commence from PAS-6B, if it would be true and correct, when PAS-6B is ready to be placed into commercial service. Subject to the earlier part of this paragraph, the "Minimum Complement" of Service Transponders on PAS-6B is [****************]. PAS-6B is anticipated to be launched in October, 1998, and the Service Date for PAS-6B is currently anticipated to occur no later than November 30, 1998, the "Latest Anticipated Service Date" for PAS-6B. PanAmSat shall use commercially reasonable efforts to cause Service from each of the PAS-6B Service Transponders to be commenced on or before the applicable Latest Anticipated Service Date. (f) Condition Subsequent to PAS-6B Service Date. If the Minimum Complement of PAS-6B Transponders cannot be provided as of the date that is forty-five (45) days after the PAS-6B Service Date, the PAS-6B Service Date shall be deemed not to have occurred and the parties shall be returned to the status quo ante, as if the PAS-6B Service Date had not occurred; provided that in the circumstances set forth in Section 2.2(e) above where Customer would have had the option to waive the Minimum Complement and accept Service from a fewer number of Transponders on PAS-6B at the Service Date (which would then be the Minimum [***] Filed separately with the Commission pursuant to a request for confidential treatment. 21 Complement) and if PanAmSat would have been required to offer Customer Service from such fewer number, Customer shall have the same option under this Section 2.2(f) to be exercised, if at all no later than ten (10) days after the earlier of: (a) the date that it is determined that the Minimum Complement cannot be met, or (b) forty-five (45) days after the PAS-6B Service Date. (g) Continued Service on PAS-3. If on the PAS-6B Service Date, Service is made available from less than [****************] PAS-6B Transponders, for each [***] below [************] PAS-6B Transponders made available, Customer shall have the option (the "PAS-3 [*********] Option") of retaining Service from one Retained PAS-3 Transponder. The PAS-3 [**********] Option shall be exercised by Customer, if at all, no later than sixty (60) days after the PAS-6B Service Date; provided that, not later than thirty (30) days after the PAS-6B Service Date, Customer shall notify PanAmSat which of the Retained PAS-3 Service Transponders (if the PAS-3 [**********] Option is for less than all PAS-3 Transponders from which Service provided by PanAmSat to Customer at the time) to which it intends the PAS-3 [**********] Option to apply, if exercised, at which point the PAS-3 [**********] Option as to the remaining Retained PAS-3 Transponders shall expire. (h) Termination of this Agreement as to PAS-6B Prior to PAS-6B Service Date. If this Agreement is terminated as to PAS-6B without a PAS-6B Service Date, Customer shall be provided with Service from the date of said termination and for the remaining Service Term of PAS-6 [***************** ***********************************************] from all of the then available NTSC and Argentina Beam Transponders on PAS-6 [********************************* *************************************************************] In addition, Customer shall have the option to be exercised within thirty (30) days of the termination of this Agreement as to PAS-6B to continue taking Service from PAS-3 (the "PAS-3 [**********] Option"). Upon timely notice from Customer to PanAmSat of exercise of said Option, its exercise shall be deemed effective on the date that this Agreement is terminated as to PAS-6B. Any PAS-3 Transponders so retained shall (as in the case in [**********]) count toward the "Minimum Complement" of the "Comparable Beam" of PAS-6. As used herein, the NSA Beam of PAS-3 shall be deemed to be a "Comparable Beam" to the NTSC Beam of PAS-6 and the SSA Beam of PAS-3 shall be deemed to be a Comparable Beam to the Argentina Beam of PAS-6. The Minimum Complement for PAS-6, counted and determined separately by PAS-6 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 22 Beam, shall be [*************] Transponders for the NTSC Beam and [****************] Transponders for the Argentina Beam. Customer acknowledges and agrees that the PAS-6 and PAS-6B Satellites have been designed by their manufacturers for planned lives of fifteen (15) years, but the launch of PAS-6 and the anticipated launch of PAS-6B are now predicted to allow enough fuel for PAS-6 to be maintained between twenty (20) years and twenty-one (21) years, and PAS-6B, eighteen and one half (18-1/2) to nineteen and one-half (19-1/2) years. Customer further acknowledges and agrees that such extended life beyond the approximate fifteen (15) years that would otherwise be anticipated is due to unusual circumstances associated with the launch of PAS-6 and the currently anticipated launch of PAS-6B and is not anticipated or required for any satellite, from which capacity may be taken or ordered pursuant to this Agreement. (i) Service Terms for Individual Satellites. The Service Terms for Transponders on each Satellite shall commence upon the Service Date for the applicable Satellite and terminate upon the earliest of: (i) subject to the express provisions of this Agreement regarding the dual illumination and the PAS-3 Options, the start of a new Phase of Service (as set forth above) in which Service from such Satellite or Beam on the Satellite is not specified to be provided, (ii) the date that the applicable Satellite is taken out of Service; (iii) the termination of this Agreement in whole or as to the applicable Satellite in accordance with provisions of Article 7 of this Agreement. 2.3 Change of Configuration. Customer acknowledges and agrees that if not all of the Service Transponders on PAS-3 meet their Service Specifications, PanAmSat may, to the extent technically feasible, change the configuration of the downlink Beams so as to avoid or limit termination under Section 7.3 below; provided, that, if Customer agrees to accept Service from such Service Transponders even on Beam(s) for which the Minimum Complement is not met, PanAmSat shall not reconfigure the downlink Beam(s) of the Service Transponders without Customer's written consent. 2.4 Degraded Service. Either before or after the applicable 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 23 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 7.2 or 7.3 shall also be stayed during any period in which Customer is considering electing a permanent waiver. 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, such 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 have Hughes conduct the pre-Service testing of PAS-6B in a manner that does not interfere with Customer's Service from PAS-6. PanAmSat shall use all reasonable efforts to coordinate with Hughes (who conducts the pre-Service in-orbit check out of PAS-6B) to allow 24 Customer, in consultation with PanAmSat, if practical under the circumstances, to test Customer's transmit and receive equipment to be used with PAS-6B 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-6B. Customer shall be responsible for any damage caused by its failure to abide by any of these conditions. 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 [****************************************************] all of which has been applied toward Service Fees hereunder. [**************************************** *****] of the Deposit was applied to offset the Service Fees for the first two months of Service from the PAS-3 Service Transponders. The remainder of the Deposit was applied, until exhausted, to offset the initial Monthly Service Fees for Service from the PAS-6 Service Transponders. 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 [******************* ******************************************************************************** ********] By way of example only, [*************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 25 ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ****************************************************************] 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 [***********************************] 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. 26 As used in this Agreement, [******************] means each [***] month period commencing on the Service Date and each [****************] thereafter, except that, for ease of [**************], the then current [***************] shall end upon the last day of [*************] (and be calculated pro rata to that point and a new [***************] shall be deemed to commence on the first day of [********************] as applicable. In addition, if there is a [**************], a similar shortening of the then current [***************] (with pro rata calculations) shall occur on [************************], with the next [***************] commencing [********************************************* *******************************************************************************] As used in this Agreement, [**************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *******************************************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 27 [********************************] [********] [*********************************************************************] [********************************************************************** *********************************************************************** *******************************************] [*********************************************************************] [********************************************************************** *********************************************************************** *********************************************************************** ***********************] [******************************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *******************************************************************************] [************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 28 ******************************************************************************* ******************************************************************************** *****] [********************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *****************] [*****] [******************************* ***********] [**] [*************] [**] [*************] [**] [*************] [**] [*************] [**] [*************] [******************************************************************************* *****************************************************] [******************************************************************************* ******************************************************************************** *******************************************************************************] (b) Monthly Obligation. Customer's Monthly Service Fee for each Service 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. 29 [******************************** ***************************** [********************************* **************************] *************************] [*******************] [*********************************** ***********************************] [*******************] [*********************************** ************************************ *******************************] [*******************] [*********************************** ************************************ *******************************] [*******************] [*********************************** ************************************ ****************************] [*******************] [*********************************** ************************************ ****************************] [******************************************************************************* *******************************************************************************] [********************************************] After the first Monthly Service Fee payment for each [****************], subsequent Monthly Service Fee payments shall be [****************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ************************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 30 [******************************* *************************** [******************************* ************************] ****************] [*******************] [************************************* **********] [*******************] [************************************* *************************************] [*******************] [************************************* *************************************] [*******************] [************************************* *************************************] [*******************] [************************************* *************************************] [************************************************************************** *************************************************************] [***********************************] [*****************************************] (c) Use of [***************************] If customer [******************************************************************************* ******************************************************************************** ******************************************************************************** ********************] then, except as provided in this Section 3.2(c), from and after the Service Date under this Agreement, the [**************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *****************************************] 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. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 31 If Customer [****************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ***********************************************] The foregoing notwithstanding, from and [************ ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 32 ***************************************] The previous sentence notwithstanding, [******************************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ********************************************] [************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ************************************] [************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 33 ******************************************************************************** ******************************************************************************** ******************************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *************************************************] (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. [********* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ********************] (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 [************ ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *********************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 34 [***************************************] [**************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** **************************************************] 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 PanAmSat. Customer acknowledges that such delinquency charge is reasonable under all the circumstances existing as of this date. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 35 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(s) themselves, Customer shall be responsible for a pro rata share (to be reasonably determined by PanAmSat) in proportion to the capacity of the applicable 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 such 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). [********************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************] ARTICLE 4. CUSTOMER'S OBLIGATIONS IN USING THE SERVICE TRANSPONDERS. 4.1 Non-interference and Use Restrictions. Customer's transmissions to and from each of the Satellites 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 Satellites, or any other satellite or transponder on such satellite, or cause physical harm to the Service Transponders, any other Transponder, the Satellites, 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 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 36 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 Satellites 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 Satellites; 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 Satellites. 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. [*********************************************************** ****************************************************************************** *************************************************************************** ****************************************************************************** ******************************************************************************* ****************************************************************************** ****************************************************************************** ***************************************************************] 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 Satellites shall conform to the characteristics and technical parameters of the Satellites. Customer will follow PanAmSat's procedures for initiating or terminating any transmission to the Satellites. Customer will operate all transmit [***] Filed separately with the Commission pursuant to a request for confidential treatment. 37 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 Satellites, their 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(s) and shall enforce these restrictions (and, to the extent it may use the Satellite(s) 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 Satellites. 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. 38 ARTICLE 5. TRANSPONDER FAILURE, PROTECTION. 5.1 Intentionally Deleted. 5.2 Intentionally Deleted. 5.3 Transponder Failure. If, after the applicable Service Date for a Satellite, 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; provided, that PanAmSat may elect to use "Substitute Capacity" on the same Satellite as the failure shall have occurred [***] Filed separately with the Commission pursuant to a request for confidential treatment. 39 (as provided below), if available and not subject to any additional operational restrictions that Customer is not willing to accept, in lieu of using Spare Equipment. Customer acknowledges and agrees that the Spare redundancy plan of each Satellite may require PanAmSat to reassign certain traveling wave tube amplifiers ("TWTAs") among Transponders to make use of a spare 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. If (a) a Service Transponder fails to meet its Service Specifications on a Confirmed Basis, and (b) the Spare Equipment associated with such Service Transponder is not available, and (c) equivalent capacity on another Transponder meeting the Service Specifications in same Beam of the same Satellite as the failure shall have occurred and designated by PanAmSat for DTH use (the "Substitute Capacity"), is available, and its use by Customer in accordance with PanAmSat's Operational Requirements would not be predicted to interfere with the use or rights of others using the Satellite (or, even if no longer used by Customer, PAS-6 or PAS-6B), then PanAmSat shall, as soon as possible and to the extent technically feasible, employ such Substitute Capacity for the failed Service Transponder to satisfy PanAmSat's obligations under this Agreement. PanAmSat may condition its provision of Substitute Capacity on Customer's acceptance, in writing, of such additional restrictions on its use that PanAmSat believes in good faith are necessary so as to protect other Protected Parties from interference. If Customer does not accept such conditions, PanAmSat shall not be obligated to provide Customer with Service from the Substitute Capacity. In the event that PanAmSat employs such Substitute Capacity for a Service Transponder, such Substitute Capacity shall be deemed to be a Service Transponder for all purposes under this Agreement. In the event that [*******************] Transponders [***************************************************] to meet their respective [***********] or [*****************************] and are entitled to [**********] under any applicable agreement with PanAmSat, and if [***] Filed separately with the Commission pursuant to a request for confidential treatment. 40 all of said Transponders are assigned to Customer or [******] then, unless PanAmSat receives contrary instructions signed by Customer and [******] PanAmSat shall, to the extent [******************************************] to the [*******************] in accordance with the [*********************] to be supplied and executed by Customer and [******] and delivered to PanAmSat, except that priority will not be given to the "[*****] Transponders" specified in the [******] Agreement. Until and unless such fully executed instructions are received by PanAmSat, such [*******************] shall be made by PanAmSat in [********************] Upon the written request of all affected parties, PanAmSat shall, if it has not already [***********************************] at the time that the request is made, in any case of [***************************] or if the use of Spare Equipment would require the [********************] of the [*************************************] for instructions for up to [**************************] provided that, the [***********] shall be deemed to have [******] at such point as PanAmSat notifies Customer that PanAmSat is [******] to [****************************] pending the [*********************** *****************]. 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 [******************************************************] In the event that [*****************] Transponders [***********************************************] to meet their respective [******] or [****************************] and are entitled to [******] under any applicable agreement with PanAmSat and if one or more of said Transponders is assigned to a person or entity other than Customer or [******], then the Protected Party who [*****************] 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 [*******************] or 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; provided further that, [******************] as between Customer [*********] shall be determined in accordance with the preceding paragraph. As used in this Section 5.3, the term [****************] shall be deemed to mean [***************** *******************]. All determinations as to when [*************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 41 ****************] shall have occurred, for purposes of determining whether the failures are [******************] shall be made by [****************** **********************************] PanAmSat hereby confirms that the only [**************************] for a [***************************************] that [*************************] this one (as deemed below and other than with [******] is with [**********************] for [*********] Transponder and there are [************************] for PAS-6 or PAS-6B. For purposes of this Section 5.3, this Agreement and the Brazil Agreement shall both be deemed to be executed as of February 29, 1996. 5.4 Reduction in Number of Transponders as Overall Power on the PAS-6 Satellite is Decreased. Customer acknowledges that it has been advised by PanAmSat that it [********************************************** **************************] on PAS-6 and that it is anticipated that [*****************************] will be subject to such a power constraint in the future, so that the remaining Transponders continue to meet their applicable Performance or Service Specifications. The power on PAS-6 is [**********] sufficient to support [*************************************] consistent with the [************] set forth in Section 2.2(b)(iii). When [*****************************] can be anticipated, before [*************] one of Customer's Transponders, PanAmSat shall [******] with Customer and all other entities who have agreed to purchase or take service from the Satellite and, provided that it is consistent with [************ ********************] and [**************] of the Satellite, shall allow Customer and such other entities [******] to select which Transponder(s) shall be [****************]. To be effective, such selection must be given in writing, signed by Customer and all other entities referenced in the previous sentence, and given to PanAmSat before PanAmSat is required, as determined by [********************************] to proceed with the [******************] of Transponder(s). If PanAmSat has not received such instructions, signed by all affected entities, at the time that [********************] is required, PanAmSat shall make the decision as to which Transponder(s) [****************** *******************] The [***************] of a Customer's Transponder under this Section 5.4 shall be treated as a [*********************] and shall count toward determining whether the applicable Transponder has [******************* ********************] This paragraph is not anticipated to be relevant to [*******************] but the principles stated will apply if it becomes necessary to do so; provided that it is agreed that the first of Customer's or [*******************] Transponders to be [************] shall be the [******] Transponders" (as defined in the [************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 42 If this Agreement is terminated as to PAS-6B without a PAS-6B Service Date (and, therefore, Customer remains on PAS-6), the then current [********************] on PAS-6 will be addressed in accordance with the preceding paragraph, subject to the following qualifications: (a) Within five (5) days of termination of this Agreement as to PAS-6B, PanAmSat shall notify Customer [*****************] as to the number of Transponders on PAS-6 that [*********************] at that time with existing PAS-6 power. For the avoidance of doubt, the power [********] set forth in Section 2.2(b)(iii) above shall not be considered for such purpose. (b) If [******] will also be remaining on PAS-6 [*********************************] then Customer and [******] shall have fifteen (15) days to select by [************************] to PanAmSat which PAS-6 Transponders should be [**********************************] to leave [***********] the [*************] number of Transponders specified in PanAmSat's notice, which selection PanAmSat shall follow as long as consistent with the overall health and performance of the Satellite. If Customer and [******] fail to give such notice within the time period specified, PanAmSat shall make the selection and so notify Customer and [******] within ten (10) days of the last day that Customer [**********] had to make such selection. Until the selection is made, Customer shall not increase its [***] of PAS-6 above that which is permitted under Phase 2, except with [********] written consent delivered to PanAmSat (but, in all events, when [**********] with [***************] within the overall Transponder power limits of PAS-6). The selection, once made, shall be deemed made retroactive to the day that this Agreement was terminated as to PAS-6B, with any of the Service Transponders on PAS-6 then specified to be [********************************] deemed to have [****************** ***************] as of that date. Any further [********************] shall be handled in accordance with the general provisions of this Section 5.4. (c) If [******] will not be remaining on PAS-6, then (subject to any "Dual Illumination Period" rights it may have under the [**************************] Customer would only have to [*************** ***************] Customer's Service Transponders in the event that there is not [********************] on PAS-6 to support Customer's Transponders, in which event the procedures set forth above would apply (but without requiring any concurrence by [******] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 43 5.4A Limitation on Customer Discretion. Sections 5.3 and 5.4 notwithstanding, if Customer and NetSat exercise their rights to select which Transponder to [***************************] under those Sections in such a manner that the Minimum Complement of a particular Beam of the Primary Satellite is [******] , when a different selection would have resulted in that Minimum Complement being preserved (and no other Minimum Complement [******] for purposes of this Agreement, there shall be deemed to be [*******] of Minimum Complement; provided that if there is a further failure on a Confirmed Basis of Transponder capacity on the affected Beam (other than that which could have been avoided by a different selection), the Minimum Complement will then be deemed [******************] By way of example only, if, after the PAS-6B Service Date, (i) only [***************] of the Service Transponders remain under this Agreement, while the use of [*********************] Transponders in the Brazil Beam (for NetSat) continues; (ii) a [**********************************] under Section 5.4; and (iii) Customer and [******] elect to have [************ ***************************] in the Customer's Latin Beam [*****************] (so that the number of Service Transponders in this Beam is reduced to [***********] instead of a Transponder assigned to NetSat, the Minimum Complement on the NTSC Beam shall not be deemed [***************] 5.4B Special Considerations Relative to the Operation of PAS-6 and PAS-6B at the [*******************]. It is not contemplated that, except during the Dual Illumination Period specified herein, NetSat and Customer would receive capacity from different Primary Satellites (i.e., one on PAS-6B and the other on PAS-6). The situation [***********] however, if at the time of the PAS-6B Service Date, the applicable Minimum Complement on PAS-6B can only be met for one of these entities, leaving the other on PAS-6. (For reference, when PAS-6 or PAS-6B serves as the "Primary Satellite" (as defined in the [********* ************] for [******] but not Customer, that Satellite is referred to in this Section as the "Other Satellite.") In such circumstances, after the Dual Illumination Period and during such period in which the PAS-6 and PAS-6B each serves as a "Primary Satellite," one for NetSat and the other for Customer, the following provisions shall apply: (1) In the event that this Agreement is to be terminated as to any individual Service Transponder pursuant to Section 7.3, whether due to a particular Transponder failure or an overall [********** ***********] on the Satellite, to the extent technically feasible, [***************] shall have the right to select as to which Transponder this Agreement shall be terminated, provided that [****************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 44 selection leaves Customer with as many Transponders in the affected Beam of the Satellite that meet their Service Specifications as would be available had [***********] not exercised this right; provided further that, within sixty (60) days of the Execution Date, PanAmSat shall designate, by notice to Customer, four (4) Transponders on each Beam of PAS-6 and PAS-6B, that, to the extent technically feasible, including meeting the standard set forth in the previous proviso; would be the last Service Transponder(s) to be so selected for termination by PanAmSat. (2) PanAmSat shall operate the PAS-6 and PAS-6B Satellites in a manner so that their telemetry signals do not interfere with each other. (3) For the avoidance of doubt, there is no obligation of PanAmSat to provide or for Customer to take inter-Satellite protection (e.g., Service from either PAS-6 or PAS-6B as substitutes for the other). 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 a 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. 5.7 Replacement Launch. Pursuant to the Letter Agreement, payments from Customer to PanAmSat totaling [*****************] toward a possible Loral replacement satellite are acknowledged; [*****************] of said amount has already [***] Filed separately with the Commission pursuant to a request for confidential treatment. 45 been or will be applied to offset Customer's obligation hereunder. It is further acknowledged that the remaining [*******************] is [******************] 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 Service Transponders, solely in order to protect the overall health and performance of the Satellite(s). 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 affected 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 Substitute Capacity and termination for failure to meet Service Specifications shall be commensurately delayed. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 46 ARTICLE 7. TERMINATION RIGHTS. 7.1 Termination for Delay in Launch of PAS-6B. If: (a)(i) a [**************************] (as defined below) occurs prior to [***********************] and (ii) (A)PanAmSat notifies Customer that either: (x) Hughes has not shipped (i.e., put in transport) the PAS-6B Satellite to the launch site by [***********************] unless the delay was due to the unavailability of the launch vehicle or other "Hughes Force Majeure" event, as defined below or (y) the Service Date of PAS-6B will not occur by [********************] (either which notice PanAmSat will give if circumstances make it clearly ascertainable that this is the case) or (B) the Service Date does not occur on or before [**********************]; Or (b) whether or not a [**************************] has occurred as of [********************] if (A) PanAmSat notifies Customer that the Service Date of PAS-6B will not occur by [****************] (which notice PanAmSat will give if circumstances make it clearly ascertainable that this is the case) or (B) the Service Date for PAS-6B does not occur by [****************] Then At any time prior to the launch of PAS-6B, Customer may terminate this Agreement as to PAS-6B on [*************] days' notice to PanAmSat, unless, in the case of clause a(ii)(A)(x) the required event takes place within said [************] days notice period. It is further agreed that, in the case of clause (a)(ii)(A)(x), Customer may give its notice, if the other circumstances for such notice are met, as early as [**********************] so as to make PanAmSat's cure period coincide with the [**************] deadline. The foregoing notwithstanding: (i) Customer shall not be permitted to terminate this Agreement as to PAS-6B under this Section 7.1 as to a delayed event if it occurs within thirty (30) days of the date as Customer may have been previously notified that the relevant event was anticipated to occur without Customer exercising its [***] Filed separately with the Commission pursuant to a request for confidential treatment. 47 termination right within thirty (30) days of said notice; provided that, if Customer's termination right accrued before the occurrence of a [*********** ***********] and there subsequently occurs a [************************] Customer shall have another thirty (30) days (from the [*************************] to make its decision to terminate, whether the [**********************] occurs before or after [********************] except that this further right to terminate will not accrue if, at the time of the [**********************] PAS-6B has already been shipped (i.e., put in transport) to the launch site and the Service Date of the Satellite is scheduled to occur within sixty (60) days of the [**********************] and (ii) Customer shall also not be permitted to terminate this Agreement under this Section 7.1 unless at the same time [**************************************************] as to PAS-6B under [***************************************************************************] PanAmSat shall also be permitted to terminate this Agreement as to PAS-6B on notice to Customer, if the construction or launch of PAS-6B has been substantially delayed [***************************] by force majeure conditions and PanAmSat determines because of force majeure conditions not to proceed with the construction or launch of PAS-6B. In such event, PanAmSat shall give Customer immediate notice of PanAmSat's determination, which determination shall be made promptly following the event(s) of force majeure that lead to such a determination. In any circumstances in which Customer has a right to terminate under this Section 7.1 and Customer's time period for decision overlaps the time period during which PAS-6B is scheduled to be shipped to the launch site, PanAmSat may require Customer to accelerate its decision process so that a decision is made before PAS-6B is actually shipped. 7.1A. [************************************************] If there is a [**********************************] prior to the launch of PAS-6B, Customer shall be permitted to terminate this Agreement as to PAS-6B on notice to PanAmSat to be exercised within thirty (30) days of the [*********** ************] (but in all events prior to the launch of PAS-6B); provided that [**********************************************] as to PAS-6B under [*****************************************] agreement. In such event, within [*****************] of invoice from PanAmSat, Customer shall [************ ********] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 48 for [********************************************************************] to [*********************************] in connection with the terminated PAS-6B program, provided that [************************] to [**************] in connection with said termination shall be reduced by whatever amounts [************************************] in connection with its [********** ************] to [*************] under [************************************* ************************************] and further provided that PanAmSat shall [****************] to Customer or [******], as they shall [************] direct PanAmSat in writing, any [************************************* ********************] given to [***********] of such [*******************] in connection with any mitigation of such liability that may be available, which [**********] shall use all reasonable efforts to enforce. The contract [************************************] that Customer and [******] are [***************************************************************************** ********], in the event of a [**********************************] by PanAmSat, to use [************************************************************************ ******************************************************************************** ***********] In addition, if PanAmSat elects [*******] proposal (which PanAmSat agrees to do if Customer [************] have [********************] required to be [*******************************] under this Section 7.1A and the [*****************************************************] Customer and [******] are [*************************************************************************** ******************************************************************************** ********] from the above. If [******] does not [***********************************] as to PAS-6B under the [***********************************] Agreement, Customer's notice of termination under this Section 7.1A shall be treated as an [**************** ******] which, within thirty (30) days of receipt, PanAmSat may either (in writing) [******] or, instead, [******] but, if [******************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *****************************************************************] If PanAmSat [********] (in writing) Customer's [************] termination under this paragraph (i.e., in circumstances where [*************************************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 49 *************************************] neither Customer nor PanAmSat would have any further obligation to each other with respect to PAS-6B. 7.1B Certain Definitions Relevant to Termination Provisions. As used herein: (i) [*************************] means [*************] of a sufficient number of Transponders on [*******************] to [***************** *****************************************************************] such that either: (A) On or before [*********************] there is [***********************************] (Customer's rights otherwise under [******************************************] notwithstanding) on [******************] that PanAmSat makes, or if permitted by Customer or [*******] could make, available to NetSat, Customer, and under PanAmSat's [*********************************************] to [*******] that would yield at least [***********************] on each of the [********************* ******************] and [*********] of [*************************] (in each case when [*******] with [**************] from the associated [******************** ************************************************] that meet their applicable [********************************************] or (B) On or before [************************] there is [*****************************************] (Customer's rights otherwise under [**********************************************************] notwithstanding) on [*****************] that PanAmSat makes, or if permitted by Customer or [*******] could make, available to NetSat, Customer, and under PanAmSat's [********************************************] to [*******] that would yield at least [***********************] on each of the [*************** ******************************] and the [***********************] (in each case when [*******] with [*************] from the associated [*********************** ****************************] respectively) that meet their applicable [******************************************] unless (C) PanAmSat is able (as to either (A) or (B)) to [*******] a sufficient number of Transponders to [*************************** ******************************************] within thirty (30) days of their applicable [*******] (i.e., as provided in [****************] of the Agreement, with respect to normal [********************] so that the applicable level of [********************] defined immediately above is not met; [***] Filed separately with the Commission pursuant to a request for confidential treatment. 50 provided that PanAmSat shall notify Customer if and as soon as it becomes clearly ascertainable to PanAmSat that sufficient [*********] to a level so that the [*******************] standard specified above will no longer be met is not possible, at which point Customer's notice of termination shall be effective, even if less than thirty (30) days after the point at which the [**********************] first occurred. Said cure period notwithstanding, for purposes of Section 7.1 and Section 7.1A, subject to PanAmSat's cure rights in (C), the timing of the [***********************] shall be deemed to have occurred when the [***********************] standard in either (A) or (B) is met and Customer's right to give notice of termination (and period in which it has such right), subject to PanAmSat's cure rights, shall commence at the point of such cumulative failure; and (ii) "Hughes Force Majeure" means any delay that is caused by act of God, or of the public enemy, fire, flood, earthquake, epidemic, quarantine restriction, strike, walkout, freight embargo, or any other event which is beyond its control or does not arise from the acts or omissions of Hughes or its respective subcontractors. 7.2 Other PAS-6B Pre-Service Date Terminations. This Agreement shall also terminate as to PAS-6B in either of the following events: (i) PAS-6B suffers a Launch Failure or (ii) if, after a launch, which is not a Launch Failure but before the PAS-6B Service Date, the Minimum Complement of the Service Transponders on PAS-6B are not capable of meeting the Service Specifications unless Spare Equipment is provided by PanAmSat in accordance with Section 5.3 so that the Minimum Complement of the Service Transponders is provided in accordance with their Service Specifications; provided that, if (A) one or more (but not the Minimum Complement) of the Service Transponders are capable of being provided in accordance with their Service Specifications, and (B) at the time, at least as many Service Transponders on PAS-6B are capable of meeting their Service Specifications as Service Transponders on PAS-6 are capable of meeting their Service Specifications, termination under this clause (ii) shall be at Customer's option exercisable (if at all) within fifteen (15) days of Customer's receiving notice of this condition. If Customer fails to exercise the termination right set forth in the previous sentence within the time specified, the Service Transponders meeting the Service Specifications shall, if PanAmSat so elects on notice to Customer within ten (10) days of the last day for Customer to have exercised the termination right, be deemed accepted under Section 2.2(e) above. As used herein, "Launch Failure" [***] Filed separately with the Commission pursuant to a request for confidential treatment. 51 means an event prior to the PAS-6B Service Date that results in the destruction of PAS-6B or the declaration of PAS-6B as a total loss (which includes a constructive total loss) under PanAmSat's launch and initial operations insurance policy for PAS-6B. 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 applicable Service Date for the Satellite, a Service Transponder fails on a Confirmed Basis, unless, within thirty days of such failure, PanAmSat restores the Transponder to its Service Specifications using, if required, any available Spare Equipment or replaces the Transponder with Substitute Capacity from the same Satellite. 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, so long as (with respect to PAS-6, on a Beam by Beam basis) the applicable Minimum Complement of Transponders applicable to the Satellite (or, on and after the date that is [***********************] after the Service Date for such Satellite, 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. Subject to Section 5.4A above, if the applicable Minimum Complement cannot be provided, subject, in the case of PAS-3 Transponders, to PanAmSat's reconfiguration rights under Section 2.2 above, Customer shall be permitted to terminate this Agreement as to the remaining Transponders on the affected Beam of the affected 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 52 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 (thereafter, that lower number being the "Minimum Complement"), [************* ******************************************************************************** ******************************************************************************** ***********************************] 7.4 Satellite [*****************] PanAmSat may determine to take a Satellite [*******************] or, in the case of clauses (d) or (e) or (f) below, relocate it to other use if: (a) in PanAmSat's [**************************] the remaining [****] on board the Satellite is [***************************] maintain [****************************************************************] allowing sufficient [***********************] the Satellite; (b) with respect to [*******] the Satellite [******* **********************] or more [*********] Transponders or [************** ******************] Transponders to meet their applicable performance or service specifications; (c)(i) with respect to PAS-6, the Satellite [*********************************] or more Transponders to meet their applicable performance or service specifications, or (ii) with respect to PAS-6B, the Satellite suffers failure of sixteen (16) or more Transponders to meet their applicable performance or service specifications; (d) with respect to PAS-6 or PAS-6B, the total of the number of Transponders on the Satellite that have failed to meet their applicable performance or service specifications and, even if they have not failed themselves, the number of Transponders for which capacity is returned under the [********************************************************************* **************************] or more for [*******] or [***********] or more for [*******] (e) with respect to the Primary Satellite, if Customer or NetSat has agreed to [********************************************], at such time that said Successor Satellite is ready to be placed into commercial service, in which event, [***] Filed separately with the Commission pursuant to a request for confidential treatment. 53 PanAmSat shall promptly notify Customer of such determination and [*****************************************] or (f) with respect to PAS-6B, at any time that a Successor Satellite is ready to be placed into commercial service, but not earlier than the earlier of: (i) the date that is [********************] after the PAS-6B Service Date, or (ii) the date on which the Satellite is predicted by PanAmSat in its good faith judgment, to have remaining fuel on board PAS-6B for only [***********] (or less) life, assuming ordinary stationkeeping operations, plus sufficient fuel to de-orbit the Satellite (the "Time for Early Replacement"). The foregoing notwithstanding, in the case of clause (c), if: (i) Customer agrees to make a [************************************************ *****] 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 (c) until the [******************************************************************************] On the date that the Satellite is [**************************] this Agreement shall [****************************] as to the [*******] Satellite. 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 54 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 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 Satellites, provided that, if such termination occurs during Phase 2, calculations will be made assuming no retention of PAS-3 or PAS-6 Transponders upon the Service Date of PAS-6B (which will be assumed to occur on its then predicted date), and if termination occurs during Phase 3A, calculations will be made assuming that the termination right specified in [************] if still available would be exercised. Such amount shall then be [************] for [******************************************* *******************] from the date paid to the date otherwise due in the absence of termination. 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. For purposes of this paragraph, [*******] shall be deemed to equal the greater of: [************************** **************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************] The foregoing notwithstanding, with respect to PAS-6, if the termination right under Section [****] has been exercised, Customer's termination [***] Filed separately with the Commission pursuant to a request for confidential treatment. 55 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 PAS-6 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 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 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 56 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 [**************************] 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 57 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. 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, 7.9, or 8.1 below or if this Agreement expires by its terms, [************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ************************] 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 as to the affected Satellite 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 58 receive the benefits of the Satellite manufacturer's indemnify, in accordance with the relevant provisions of PanAmSat's contract with the Satellite manufacturer. 7.8 Cross Termination by Customer. Upon the termination of this Agreement with respect to the entire Primary Satellite under any of Sections 7.3, 7.4, 7.7, 7.9, or 8.1, Customer shall have the option to terminate this Agreement as to the PAS-3 Satellite effective immediately on notice to PanAmSat. Such notice must be given, if at all, at the same time that Customer notifies PanAmSat of its termination of this Agreement as to the Primary Satellite, or, if termination of the Primary Satellite occurs under the listed sections on PanAmSat's notice to Customer, within ten (10) days of that notice. For the avoidance of doubt, other than under Section 7.5 (Termination by PanAmSat of Cause), the termination of this Agreement with respect to PAS-3 or, provided that the Minimum Complement is maintained on the Beam(s)), partial termination of this Agreement as to individual Transponders, shall not result in a termination of this Agreement as to other Transponders, nor (except under Section 7.5) shall the termination of this Agreement as to one of PAS-6 or PAS-6B result in the termination of this Agreement as to other one. 7.9 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 7.9, to terminate this Agreement [******************** *****************************************] after the PAS-6 Service Date. Exercise of such termination rights by Customer must occur, if at all, on or before the earlier of: (a) the [********************************] of the PAS-6 Service Date; or (b) [*************************] 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 7.9, but in no event shall such exercise decision be required earlier than [****************************************] PAS-6 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 59 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 applicable Service Date for the Satellite, 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 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 rights to terminate under Sections 7.1, 7.1A, and 7.2, and, to the extent a failure to provide Service results from a malfunction of a Satellite, under Section 7.3, shall be governed by those Sections. 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 Sections 7.1, 7.1A, 7.2, or 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. [***************************************** ***********] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 60 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 2.2(b), 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(s), 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. 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(s) 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(s) 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, 61 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(s) 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 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(s) 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(s) 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. 62 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 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 Collateral Trustee With respect to PAS-3: (a) Customer hereby acknowledges that this Agreement and all rights granted to Customer hereunder are subject and subordinate to a security interest and lien in favor of First Trust National Association (the "Trustee"), as the same may be assigned (the "Security Interest") in and to the Transponder(s) that [***] Filed separately with the Commission pursuant to a request for confidential treatment. 63 may be owned and operated by PanAmSat and which are the subject of this Agreement (and/or the proceeds from the sale or other disposition of all or any portion thereof, or any insurance that may be received by PanAmSat as a result of any loss or destruction of, or damage to, the Transponders identified above). The Security Interest shall be deemed to arise under all security agreements, indentures, mortgages, pledge agreements and other collateral documents between Trustee and PanAmSat, including all renewals, modifications, consolidations or replacements thereto (collectively, the "Collateral Documents"). Notwithstanding the Security Interest, the Trustee agrees that Customer shall continue to have the benefits of this Agreement notwithstanding any default on the part of PanAmSat under the Collateral Documents, so long as (i) Customer is not in default under the terms and conditions of this Agreement, (ii) Customer shall not pay any of its obligations under this Agreement more than 30 days prior to their scheduled payment date under this Agreement, (iii) this Agreement is not supplemented, amended or extended or otherwise modified in any manner which adversely affects the interests of the Trustee on behalf of the holders of the Senior Secured Notes (as defined in the Collateral Documents) in a degree greater than the manner in which it adversely affects PanAmSat, and (iv) after receipt of notice from the Trustee of a default by PanAmSat under the Collateral Documents, Customer agrees to make, and makes, all payments thereafter as instructed by the Trustee. (b) Customer acknowledges and consents to the foreclosure, should it occur, upon this Agreement by the Trustee or its designee, successor or assignee, and the consequent replacement of PanAmSat under this Agreement by the Trustee, its designee, successor or assignee, or another purchaser or assignee, provided that any successor to PanAmSat under this Agreement (i) expressly assumes PanAmSat's obligations hereunder for the benefit of Customer, and (ii) succeeds to substantially all of the right, title, and interest in and to all assets of PanAmSat reasonably necessary for such successor to perform its obligations under this Agreement. Upon such succession and assumption by a party other than the Trustee, the Trustee and its successors under this Agreement, other than the ultimate successor, shall be released from any further liability under this Agreement. (c) The Trustee shall be entitled to exercise all rights and to cure any defaults of PanAmSat under this Agreement, within such cure period as may be available to PanAmSat under this Agreement. Upon receipt of notice from the 64 Trustee, Customer agrees to accept such exercise and cure by the Trustee and to render all or any part of the performance due by Customer under this Agreement to the Trustee. (d) Intentionally Deleted. (e) The Trustee shall be deemed an express third party beneficiary of this Section 10.2. This Section 10.2 shall be self-operative and no further instrument of subordination shall be required by any security agreement, mortgage or other document reflecting the Security Interest to make this subordination effective. In confirmation of such acknowledged subordination, Customer shall execute promptly any instrument or certificate which PanAmSat or the Trustee may reasonably request. 10.3 Subordination to Other Entities. Customer acknowledges and agrees that PanAmSat may grant security interests in the Transponders and/or the Satellite(s). In such event, provisions that are the same as in Section 10.2 above 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(s) 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. 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 65 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 to its current programming practices 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) or 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. Customer shall also be permitted to assign, in part, but not in whole, or in collective parts but that do not equal a whole, its obligation to make payment and such other limited rights, and associated obligations, as Customer and PanAmSat shall negotiate in good faith for Service from individual Transponders to local distributors of Customer's DTH Service in which Customer or any Approved Participating Company holds, directly or indirectly, at least, or in combination with each other, at least 25% of its equity ("Partial Assignees"), provided that: (i) all of the conditions set forth in the previous paragraph are met (except, as to (a), that the assumption shall be limited to the obligations and rights so assigned pursuant to the above pursuant to an assignment and assumption agreement that shall reflect what is to be agreed above and shall otherwise be in form and substance satisfactory to PanAmSat, as it shall determine in good faith, and that condition (d) is met under alternative (d)(i) only); (ii) all rights and obligations of Customer under this Agreement shall be interpreted and exercised, regardless of any such partial assignment, as an integrated whole (e.g., Minimum Complement) and any failure of any Partial Assignee or Customer to perform its obligations to PanAmSat may be treated by PanAmSat as a failure of Customer and 66 all of its Partial Assignees to perform, and PanAmSat may exercise its remedies accordingly; (iii) Customer shall act as the sole agent for any Partial Assignee for purposes of implementing this Agreement, both to provide a single point of contact for notice from PanAmSat and to give PanAmSat notice of any exercise of rights by a Partial Assignee (PanAmSat being entitled to rely on a notice given to it by Customer, in this regard, without inquiry); (iv) any such partial assignment notwithstanding, PanAmSat's sole liability under this Agreement shall be, as otherwise specified in this Agreement, to Customer and Customer shall indemnify and hold harmless PanAmSat from any cause of action of any kind that may be brought against PanAmSat by any Partial Assignee that is derived in any respect from any partial assignment that may be permitted hereunder (including, without limitation, any dispute between or among Customer and its Partial Assignees), including the reimbursement of PanAmSat for reasonable attorneys fees and costs associated with defending such action, and for any other material costs or damages that PanAmSat may incur by virtue of having permitted a partial assignment that PanAmSat would not have been reasonably likely to have incurred had this Agreement not been so partially assigned and had remained entirely with Customer. For the avoidance of doubt, under no circumstance shall Customer be permitted to assign separately from a permitted assignment of the entire Agreement its rights under Articles 16 or 18 hereof. 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, 7.1A, 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 [**********************] purposes that are consistent with Customer's obligations to PanAmSat under this Agreement. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 67 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, Mexico Platform, NetSat, 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 (for PAS-3 and PAS-6) or will use all reasonable efforts to obtain by the PAS-6B Service Date (for PAS-6B) and will use all reasonable efforts to 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-3, PAS-6, and PAS-6B. 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 subsequently filed with the FCC or other applicable governmental entity, 69 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. 69 ARTICLE 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF PANAMSAT. 13.1 Orbital Location. PanAmSat has been authorized to construct, launch, and operate PAS-3 and PAS-6 in geostationary orbit at 43(degree) West Longitude ("W.L."). PanAmSat will promptly apply to the FCC for authority to launch and operate PAS-6B in geostationary orbit at 43(degree) W.L . As long as Customer has rights to Service hereunder from the applicable Satellite, PanAmSat shall use such orbital location (or, to the extent that PanAmSat obtains FCC authority to do so, any location(s) within five degrees of 43(degree) W.L.), 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(s), from which Customer has right to Service, 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 a Satellite outside of the orbital range from 38(degree) West Longitude through and including 48(degree) West Longitude shall, for purposes of Section 7.3, constitute a failure of the Service Transponders on that Satellite 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(s) and to comply in all material respects with all FCC and other governmental regulations regarding the operation of the Satellite(s); 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-3, PAS-6, and PAS-6B. 13.3 Operational Reports. PanAmSat shall provide Customer a quarterly written operational report concerning the Satellite(s) which shall include information regarding the status of Spare Equipment and updated projections regarding the predicted life of the Satellite(s). PanAmSat shall also notify Customer as soon as practicable of any significant anomalies with respect to a Satellite which 70 have a material effect on the Service Transponder(s) or materially reduce the projected life of a Satellite. ARTICLE 14. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS. 14.1 Progress Reports. Beginning not later than ninety (90) days after the date of execution of this Agreement and continuing until the PAS-6B Service Date, PanAmSat shall furnish to the Customer on a monthly basis a written progress report that shall state PanAmSat's projected scheduled launch date and projected date that Service will commence for PAS-6B. PanAmSat shall notify Customer as soon as possible of any significant change in the then-anticipated PAS-6B Service Date, including any anticipated delay beyond the Latest Anticipated Service Date for PAS-6B or any change in the month of anticipated delivery or of launch for PAS-6B beyond October, 1998, and of any formal notification of a delay in construction or launch of PAS-6B that PanAmSat may receive from its construction or launch contractors. PanAmSat shall keep Customer informed periodically of written communications to PanAmSat from the FCC which materially affect PanAmSat's ability to fulfill its obligations to Customer under this Agreement and to timely provide the Service, and shall promptly deliver copies to Customer of any such written communications. 14.2 Inspection Rights of Customer. PanAmSat shall give Customer reasonable notice of the commencement of pre-commercial service in-orbit testing for PAS-6B. Subject to the consent of PanAmSat's manufacturer, which PanAmSat shall seek to obtain and Customer's execution of any additional proprietary data agreement that the applicable manufacturer may require, Customer shall be given access to the test data from such tests that are relevant to the Service Specifications of Service Transponders and Customer shall be allowed to be present during such in-orbit testing. In addition, again subject to the consent of the manufacturer and the execution of any necessary proprietary data agreement that the manufacturer may require, PanAmSat shall give Customer access to pre-commercial service test information and reports relevant to the PAS-6B Service Transponders, allow Customer to inspect the work in progress at reasonable times and upon reasonable notice, and allow Customer to be present during pre-commercial service testing for which PanAmSat also has access. It is understood, in this regard, that the 71 implementation of this paragraph is intended to be implemented at a cooperative level largely between the respective engineers of the parties and that formal notice of events or information will not be required. This Section 14.2 does not apply to PAS-3 and has already been implemented for PAS-6. 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 or benefits and burdens contemplated under the Agreement are substantially affected, the parties shall seek and use all reasonable efforts to reconstitute this 73 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 10.2, 10.3 and 17.1, 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, with respect to PAS-3, are intended for the benefit of both PanAmSat and all other Protected Parties on PAS-3, except that no Protected Party who has the right to uplink to a 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 a 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. 15.5 Notices. (a) Telephone Notices. For the purpose of receiving notices from PanAmSat regarding preemption, interference or other technical problems, 73 including with respect to Transponder failure and restoration, Customer shall maintain at each earth station transmitting signals to the Satellite(s) a telephone that is continuously staffed at all times during which customer is transmitting signals to the Satellite(s) 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 Greenwich, Connecticut 06830 business: Attention: General Counsel To PanAmSat if by facsimile: 203-622-9163 Attention: General Counsel 74 With a copy to: If by recognized courier service or Goldberg, Godles, Wiener & Wright by personal delivery to its principal 1229 Nineteenth Street, N.W. place of business: Washington, D.C. 20036 Attention: Henry Goldberg If by facsimile: 202-429-4912 Attention: Henry Goldberg To Customer if by recognized courier Sky Multi-Country Partners service or by personal delivery to its c/o Sky Latin America principal place of 14750 NW 77th Court, Suite 220 business: Miami Lakes, Florida 33016 To Customer if by facsimile: 305-816-5111 Attention: President With a copy to: If by recognized courier service or by The News Corporation Limited personal delivery to its principal 1211 Avenue of the Americas place of business: New York, New York 10036 Attention: Group General Counsel If by facsimile: 212-852-7147 and The News Corporation/Sky Latin America 10201 West Pico Boulevard Los Angeles, California 90035 If by facsimile: 310-369-3742 Attention: Executive Vice President, Business Affairs and If by facsimile: 310-369-3595 Attention: Executive Vice President, Legal Affairs 75 and Globo Comunicacoes e Participacoes Ltda. A.V. Afranio De Mello Franco 135 - 1 Andar Rio de Janeiro - RJ - Brasil CEP 22 430-060 Attention: Ronaldo Mascarenhas If by facsimile: 011-55-21-529-7695 and Debevoise & Plimpton 875 Third Avenue New York, New York 10022 Attention: Michael J. Gillespie If by facsimile: 212-909-6836 and Televisa International LLC 201 South Biscayne Blvd. Miami, Florida 33131 Attention: General Counsel If by facsimile: 305-377-8129 and Tele-Communications International, Inc. 5619 DTC Parkway Englewood, Colorado 80111 If by facsimile: 303-267-5651 Attention: President and If by facsimile: 303-488-3207 Attention: General Counsel 76 and Grupo Televisa S.A. Avenida Vasco de Quiroga #2000 3er Piso, Colonia Sante Fe Mexico, D.F. 01210 Attention: Chief Financial Officer If by facsimile: (525)-261-2044 and Norman P. Leventhal Leventhal Senter & Lerman 2000 K Street, NW, Suite 600 Washington, DC 20006 If by facsimile: (202)-293-7783 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. 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. 77 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 among 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 over the Territory that are [***********************] to or [***************************] from the PAS-6 or PAS-6B Service Transponders ("South American 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 [*********************] of the South American 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 [**********************], 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 South American Ku-band Transponders subject to negotiation and Customer and the Customer Companies [***] Filed separately with the Commission pursuant to a request for confidential treatment. 78 with respect to transponder capacity to be used for the provision of DTH Service to the Territory). (ii) During the [****************] negotiating period: (A) if the Transponders on the Collocated or Successor Satellite are comparable (in terms of power and coverage) to the PAS-6 Transponders, PanAmSat agrees to [*******] Customer an end of life service contract with service fees for a [*********************] on the applicable satellite that shall, subject to the qualifications stated below, be [******************************************* *************************************************************************] per month per Transponder increased for [*************] by a [***************] equal to the increase in the [***] (as defined below) from the Service Date of the PAS-6 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), or (B) if the Transponders on the Collocated or Successor Satellite are comparable (in terms of power and coverage) to the PAS-6B Transponders, PanAmSat agrees to offer Customer an end of life service contract with service fees for a Bulk Acquisition 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-6B 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 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 79 [**************************************] and [**************************] and [*************] a Successor or Collocated Satellite relative to such costs of the [*******] or PAS-6B [********] (as applicable in clause (ii) above), including increases in [******************] or the need to purchase [*****************] 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-6 or PAS-6B, as applicable, 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 South American Ku-band Transponders on the applicable Collocated or Successor Satellite. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 80 (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 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 [***********************] South American 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 such [*************************************] by Customer in the Territory, other than pursuant to an obligation under the [******************] 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 [**************************** *************] as to any [**************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 81 that is [******************************************************************** ************************] unless in either case PanAmSat is required by [***********] to proceed with the [*****************] of a [********************] under the [*******************] (the "Decision Period"). In addition, PanAmSat will not require Customer to make a decision whether [******************************************************************************* ***************] (and the "Decision Period" will be so extended), unless either (i) PanAmSat was [**********************] by [**********], as provided above, or (ii) 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, unless PanAmSat was [************************************************************************** *********] if PanAmSat notifies Customer in [******************] of PanAmSat's [********************] a [*******************] either with [********** ***********************************] or [***************************] Transponders that would have a [******************************** *******************************************] to have South American Ku-band Transponders, Customer [*******************************] whether to [**************] an agreement to [****************] on such Satellite or [***********************] of a Satellite employing such frequencies for [**********************************] 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)(i)(B) 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)(i)(B) shall not be deemed to give rise to rights under this or related provisions. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 82 (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 the [**************************] for [********************************* ****************] and, if Customer agrees to [*******************] on a [*******************************************] of the Service Date of [*** ******************************************************************************] each with at least twelve "South American 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 the [*****************************] by [*********] under the [*********** ***********] 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; [***] Filed separately with the Commission pursuant to a request for confidential treatment. 83 (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 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, as applicable: (A) a Successor Satellite for PAS-6 can be scheduled to be available (subject to the conditions stated herein, at Customer's election) either [**************************************** *****************] of PAS-6 (an "Early Successor Satellite") or, provided that the termination right specified in [****************] above is not exercised and provided that NetSat has not agreed to acquire capacity on [***] Filed separately with the Commission pursuant to a request for confidential treatment. 84 an "Early Successor Satellite," by such time that the underlying satellite is to be taken out of service in accordance with [**************] above, and (B) a Successor Satellite for PAS-6B can be scheduled to be available no earlier than the [****************************] and no later than the date that the Satellite would otherwise be scheduled to be taken out of service under [**************] (it being understood that PanAmSat may in its discretion, also elect itself to proceed with a Successor Satellite scheduled to be available at any time during this period), and (C) 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 (or by such other period as the parties may negotiate in connection with any underlying agreement for the provision of service from such a Collocated Satellite). (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 [*******************************************] 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 [*********************] who, as of the Execution Date, held a majority of the voting equity of the Customer. (If TINTA elects to be deemed a Founding Partner under Section 18.4, it shall be deemed a Founding Partner for the purposes of the preceding sentence.) 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), other than by pursuant to clause 1.8(b)(ii), 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 (on the Primary Satellite and, if applicable, PAS-3 Transponders that are retained by Customer under either Section 2.2(g) or Section 2.2(h)) that meet their Service Specifications [*************** [***] Filed separately with the Commission pursuant to a request for confidential treatment. 85 *****], 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 the Primary Satellite (or, if Customer makes a [*******************] of [**************] on a [**************************] to [*********] such [************************] at its presently assigned location or at such [************************ ************] to which the FCC may authorize the Primary Satellite to be moved, or, to the extent that this Section 16.1 survives the termination of this Agreement under clause (e) above, the [**************************] of the Primary Satellite 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 [*************************] as the Primary Satellite while the Primary Satellite is still in [**********************], or, to the extent that this Section 16.1 survives the termination of this Agreement under clause (f) above, the [**************************] of the Primary Satellite from which Customer [****] the [************] provided under this Agreement. PAS-6B shall not be deemed to be a Successor Satellite or a Collocated Satellite to PAS-6. (h) [***************************************] This Section 16.1 does [******************] to [********] or its successor satellite(s) or, unless there is no PAS-6B Service Date, [*********] nor shall the termination of this Agreement solely as it relates to[************************************* ********] have any [********] on this Section 16.1. Except as provided in clause (f) above, this Section 16.1 shall [*********] to apply at such time that [***] Filed separately with the Commission pursuant to a request for confidential treatment. 86 this Agreement is [*********************************************] Neither PanAmSat nor Customer shall be required to make any decision or take any action under this Section 16.1 until after the end of the Interim Period. 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 Globo, Televisa, TINTA, and News (the "Current 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 [********** ***************************************] 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 L. 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. ARTICLE 18. OPTIONAL RIGHTS. 18.1 [*********] Option. PanAmSat has entered into an agreement with [***************************************************************************** *********] at a price of [*********************] to secure [*********** ***********] for a [******************] Satellite to have [*********** ************] configuration and performance as [***********] which Hughes would then agree (subject to provisions regarding unanticipated delays) to make available in time for [***********] within [***************] of ordered completion, but not earlier than [******************] provided that the order for completion may not be made later than [******************** ******************] after the [**********************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 87 Customer and [**********] are evaluating whether to commit to a [**********] in the event of a [********************************] Not later than [******************] Customer [*************************] shall notify PanAmSat whether they desire to pursue a [******************] in accordance with the first paragraph of this Section 18.1. In such event, the parties shall negotiate in good faith to reach an amendment to this Agreement to provide for such a [********************************************] such negotiations to be concluded, and an amendment executed (if at all) no later than [****** ************] It being understood and agreed that certain material terms will have to be negotiated at the time, certain basic parameters of the contemplated [********] Amendment, if entered, are as follows: (1) Customer [****************] would both commit to take [**********************] transponder capacity from [************* **********************************************] and would be required to exercise any available [***********************] as to [************* *********************] (2) Customer [******************] would continue to be obligated to take capacity from PAS-6 (and, if applicable, PAS-3) [*************************] and in the event that [***************************** ******************************************************] or if the [***********] program is otherwise terminated (e.g., for delay -- the conditions of such termination to be negotiated), the Agreement as to PAS-6 (and, if applicable, PAS-3) [*******************] (3) Upon the execution of the [***********] Amendment, PanAmSat shall order the [********************] from [*********], subject to item (4), at [**********************] If [******************** *******************] PanAmSat would then order [***********] to be completed and launched, again subject to item (4), at [***************] (4) Once this Agreement is amended as to [****** ********] if Customer terminates this Agreement as to PAS-6B [**************] Customer [********* ******************] shall be [****************** *********************************************************] subject to any available [****************] from [********]. Further, if PanAmSat orders [**********] to complete PAS-6C [**********************************] any pre-launch termination by Customer [*************] of PAS-6C (under conditions to be negotiated) shall be subject to their [******************** ***************] of its [******************************************************* **********] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 88 It is understood and agreed that if the parties are unable to reach agreement on a [***********] Amendment, this Agreement shall continue in full force and effect. Further, in no circumstances will PanAmSat be required to commit to [*************************************************] if Customer and [*********] are not also so committed. Without limiting the above, it is understood that PanAmSat is also exploring other potential [*************] satellite options in this event. If presented by PanAmSat, Customer agrees in good faith to consider such alternate proposal(s). 18.2 [************] Option. Not later than sixty (60) days from the Execution Date of this Agreement, Customer may elect on notice to PanAmSat (the [*****************************]) to [***********] this Agreement, as it would apply on and after the PAS-6B Service Date, to [*************************** ******************************************************************************** ********************************************************] In such event, effective on the PAS-6B Service Date (and, for avoidance of doubt, only if the occurrence of the PAS-6B Service Date is not deemed negated under Section 2.2(f)), this Agreement shall be deemed amended, without further action of the parties, into the form of agreement that is set forth in Appendix N hereto. If the [*****************************] is exercised, PanAmSat shall also permit Customer to [******************************************************* *************************************************] [************************************************************* ******************************************************************************** *********************************************************************] [************************************************************* ******************************************************************************** ******************************************************************************** *****] [************************************************************* *******************************************************************************] [********************************************************************** ******************************************************************************** ************************************* [***] Filed separately with the Commission pursuant to a request for confidential treatment. 89 ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** **********************************************************************] [*******************************] [************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ****************************************************] [***] Filed separately with the Commission pursuant to a request for confidential treatment. 90 [************************************************************* ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** *************************************************************] [********************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** **************************************************] 18.4 TINTA Option. TINTA may elect, on notice to PanAmSat, to be given no later than the date that is sixty (60) days after the Execution Date, 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) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 91 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: [**********] 3.2(b) 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) Catastrophic Failure 7.1(B)(i) Collateral Documents 10.2(a) [**********************] 16.1(g) Comparable Beam 2.2(h) Condition Subsequent to PAS-6B Service Rate Preamble Confirmed Basis 5.3 Control 1.4(b) [***] 1.1(a)(ii) Current Guarantors 17.1 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 Disclosure Schedule 12.4 [***] Filed separately with the Commission pursuant to a request for confidential treatment. 92 DTH Service 1.4(a) Dual Illumination Period 5.4(c) [**************************] 16.1(c)(viii) [**] 3.2(a) [*******************] 1.6(c) Execution Date Preamble Extra Transponders 16.1(c)(iii) [*************] 3.2(a) Founding Partner in Competition 1.8(d) Founding Partners 1.4(b) [******] Transponders 5.4 Globo Preamble Home Page Transponder(s) 2.2(c) Hughes Force Majeure 7.1B(ii) Hughes Preamble Indemnitee 9.6 Indemnitor 9.6 Intervening Negotiations 18.3(b) Ku-band 1.4(a) [*****************] 18.3(b) Latest Anticipated Service Date 2.2(e) Launch Failure 7.2 Letter Agreement Preamble Limiting Negotiations 18.3(b) [******************] 18.1 Loral Preamble Mexico Agreement Preamble Mexico Platform Preamble Minimum Complement 2.2(e) [*************************] 1.6(a) [******************] 2.2(b)(i) [*********************************] 3.2(b) Monthly Service Fee 3.1 Negotiation Period 16.1(f) NetSat Preamble News Preamble Non-DTH Outlets 1.4(b) Non-DTH Transponder 1.4(c) Northern Part of the Continent 1.4(a) Operational Requirements 4.1 Option 18.3(a) Other Satellite 5.4(B) PanAmSat Company 1.8(a)(i) PanAmSat Group 9.3 PanAmSat Preamble PAS-3 [***********] Option 2.2(h) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 93 PAS-3 Preamble PAS-3 Service Date 2.1 PAS-5 Preamble PAS-6 Preamble PAS-6 Service Date 2.2(a) [****************************] 18.2 PAS-6B Preamble [*********************] 18.1 Payment Force Majeure 7.5A [********] 2.2(a) [********] 2.2(b) [********] 2.2(h) Primary Satellite Preamble [*******************************] 1.8(a)(i)(A) programming 1.4(a) Protected Parties 5.3 [*********] 3.2(b) [**********] 18.3(a) [*******************] 18.3(a) Repayment Period 18.2 [*****************] 2.2(b)(iii)(A) Retained SSA Transponder 2.2(b)(iv) Satellite Preamble [***********************] 3.2(c) Security Interests 10.2(a) Service Date 2.1 Service Fee 3.1 Service Preamble Service Specifications 2.2(e) Service Term 2.1 Service Transponders Preamble simultaneous 5.3 South American Ku-Band Transponders 16.1(a)(i) Southern Part of the Continent 1.4(a) Spare Equipment 5.3 [***************] 2.2(b)(iv) Substitute Capacity 5.3 [******************] 16.1(g) Taxes 3.5 Televisa Preamble Term 2.1 Termination Payment(s) 7.5 Territory 1.4(a) Time for Early Replacement 7.4(f) TINTA 1.4(b) Transaction Costs 1.6(c) [***] Filed separately with the Commission pursuant to a request for confidential treatment. 94 transmissions 1.4(a) Transponder Preamble Trustee 10.2(a) TWTAs 5.3 [**********************] 3.2(d) Defined terms include plural or singular versions and derivatives therefrom (e.g., "Control," "Controlling"). [***] Filed separately with the Commission pursuant to a request for confidential treatment. 95 Each of the parties has duly executed and delivered this Agreement as of the day and year first written above. Notarized: PANAMSAT INTERNATIONAL SYSTEMS, INC. By: Name: Title: SKY MULTI-COUNTRY PARTNERS Notarized: By: SESLA, INC., a General Partner By: Name: Title: Notarized: By: DTH USA, INC., a General Partner By: Name: Title: 96 Notarized: By: TELEVISA MCOP HOLDINGS, INC., a General Partner By: Name: Title: Notarized: By: TCI MULTICOUNTRY DTH, INC., a General Partner By: Name: Title: 97 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. Intentionally Deleted K. Intentionally Deleted L. Form of Guaranty M. Form of Transmission Plan N. [****************************************] * Three versions each are supplied: one for each of PAS-3, PAS-6 and PAS-6B. [***] Filed separately with the Commission pursuant to a request for confidential treatment. 98 EX-27 15 EXHIBIT 27
5 This schedule contains summary financial information extracted from the PanAmSat Form 10-Q for the quarterly period ended March 31, 1998 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1998 MAR-31-1998 48,569 0 83,297 (1,031) 0 284,259 3,147,782 (475,797) 5,795,660 93,658 786,660 0 0 1,491 2,595,048 5,795,660 193,025 193,025 0 108,149 0 0 22,208 62,668 27,320 35,348 0 0 0 35,348 $ .24 $ .24
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