Common use of First Offer Rights Clause in Contracts

First Offer Rights. In the event that Holding Company determines ------------------ to launch a satellite with the following frequencies: Ku BSS frequencies (11.7 - 12.5 Ghz in Region 1, 12.2 - 12.7 Ghz in Region 2 and 11.7 - 12.2 Ghz in Region 3) (the "BSS Band") into any of the following orbital slots as such -------- orbital slots may be modified in the FCC authorization process, the ITU registration process, or in the course of frequency coordination with other systems: East Longitude: 36 degrees, 40 degrees, 48 degrees, 54 degrees, 101 degrees, 124.5 degrees, 132 degrees, 149 degrees, 164 degrees and 173 degrees; and West Longitude: 49 degree and 67 degree (the "BSS Satellites"), the Company -------------- shall give HE or its designated Subsidiaries (referred to herein as the "HE Designee") notice of such determination and the HE Designee shall have the opportunity (the "First Opportunity") to enter into a full life service ----------------- agreement with respect to some or all, but not less than half of the available capacity in the BSS Band on the applicable BSS Satellite, of the BSS transponders (the "BSS Transponders") ---------------- on the first BSS Satellite that the Company intends to place into each such slot on terms and conditions to be negotiated in good faith and consistent with normal business practice. The negotiation period with respect to capacity on each such BSS Satellite shall be for three months (the "Negotiation Period"). ------------------ The Negotiation Period may be initiated by either party on notice to the other at any time within the time period set forth below. Applied separately to each BSS Satellite, the Negotiation Period shall begin on the date on which the Company notifies the HE Designee of a firm commitment to construct a BSS Satellite; and shall commence not more than thirty months prior to the proposed launch of the BSS Satellite and end not later than fifteen (15) months prior to the date that the BSS Satellite is scheduled to be launched. If negotiations are not initiated by either party by such date or successfully concluded with a binding service agreement within the Negotiation Period, unless HE has given Company a final offer (as defined below), neither party shall have any further obligation pursuant to this Section 3(e), with respect to the BSS Satellite in question. The conclusion or failure to conclude such an agreement as to one orbital slot shall not, however, affect the parties' rights and obligations hereunder as to the remaining BSS Satellites for other orbital slots referenced in this Section, if still extant. At any time prior to the end of the applicable negotiation period specified above, HE shall have the right to make to the Company HE's "best and final offer" (a "Final Offer") of the price at which it is willing to enter into ----------- an end of life service agreement for a stated number of BSS Transponders on the BSS Satellite, which must be on terms and conditions that are otherwise acceptable to the Company. If HE makes the Final Offer, for as long as it is held open (i.e., that it may be accepted by the Company without HE's subsequent right to withdraw it), the Company will not, without first offering HE the opportunity to do so, enter into a purchase or long term transponder service agreement for the same number or fewer BSS Band transponders than proposed by HE at a lower price per BSS Transponder (which, for the purposes of comparison, will be calculated on a net present value basis as determined by the Company, but notified to HE so that HE may make an adjustment in its offer to reflect this net present value) than the price stated in the Final Offer. The Company may condition its offer to HE on HE's acceptance of such other price, quantity, length of term and other terms and conditions that the Company would offer a third party at the time (the "Revised Offer"). HE shall have ten (10) days to accept the Company's Revised -------------- Offer or it shall be deemed to have been rejected. For the avoidance of doubt, the previous sentence shall not apply to the Company's acceptance of the Final Offer, as to which no further acceptance or rejection by HE is required or permitted. The Company shall also notify HE at such time as the Company lowers its price for long term transponder agreements on the applicable BSS satellite for the number of transponders and for the service terms which had been included in the Final Offer, which notice shall be given not fewer than ten (10) business days before the reduced price is offered to any third party, during which period HE will have the right to accept such revised offer. As used in this Section 3(e), "Company" or "Holding Company" includes its Subsidiaries or any of them.