EXHIBIT 10.62
SATELLITE LEASE AGREEMENT
for the AMSC-1 Satellite
By and Among
AMSC Subsidiary Corporation,
American Mobile Satellite Corporation
and
African Continental Telecommunications Ltd.
December 2, 1997
Table of Contents
Page
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1 Satellite Lease Agreement
-- General Terms ...........................................
1.1 Satellite Lease Agreement ...........................
1.2 Term ................................................
(a) Initial Lease Term ..............................
(b) Renewal .........................................
1.3 Payments From Lessee.................................
(a) Lease Payments During Lease Term.........................
(b) Initial Payment..........................................
(c) Post-Offering Payment....................................
(d) Initial AMSC Payment Expenses............................
(e) Treatment of Initial Payment, Post-Offering Payment
and Initial AMSC Payment Expenses.....................
(f) Manner of Payment........................................
(g) Late Payment.............................................
(h) Taxes
1.4 Return or Retirement of Satellite Upon Expiration of
Lease Term or Termination of Lease ...............
2 Steps To Be Taken Before Relocation of Satellite.............
2.1 Relocation of Satellite .............................
2.2 In-Orbit Insurance ..................................
2.3 Lessee to Secure TT&C Facilities and
Service to Receive and Operate Satellite .........
3 Obligations and Covenants of Lessee .........................
3.1 Enabling the Satellite to Continue to
Occupy Relocated Orbital Position ................
3.2 Notice of Problems Involving Satellite...............
3.3 Use of Fully-Qualified Personnel.....................
3.4 Satellite Operation: Compliance With Specified Operating
Procedures and Applicable Legal Requirements .....
3.5 TT&C.................................................
3.6 Frequency Coordination...............................
3.7 Safe Operation.......................................
i
3.8 Reporting............................................
3.9 Government Approvals For Use of Satellite, Etc.......
3.10 Additional Guarantees...............................
3.11 Cooperation and Support in Obtaining and
Maintaining Insurance.............................
3.12 Additional Financial Obligations and Covenants......
(a) Delivery of Business Plan.......................
(b) Delivery of Financial Information...............
(c) Actions Requiring Approval of Lessor During Start-Up.
(d) Other Actions Requiring Approval of Lessor......
(e) Resolution of Disputes..........................
(f) Escrow of Securities............................
(g) Definitions.....................................
4 Other Rights and Obligations of Lessor.......................
4.1 Rights...............................................
(a) Inspection......................................
(b) Action to Protect Satellite.....................
(c) Testing.........................................
4.2 Certain Responsibilities of Lessor...................
(a) Documentation...................................
(b) Performance Tests...............................
(c) U.S. and Canadian Government Approvals
For Relocation and Export of the Satellite..
(d) Timing of Delivery of Satellite.................
5 Termination Rights; Effect of Termination; Lease Continuation.
5.1 Lessee's Right to Terminate in
Certain Circumstances..............................
5.2 Lessor's Right to Terminate in
Certain Circumstances..............................
5.3 Lessor's Right to Terminate in
Certain Additional Circumstances...................
5.4 Lessor's and Lessee's Rights to Terminate
in Event of Total Loss or Constructive Total Loss .
5.5 Lessor's Right to Terminate If Lessee's TT&C
Contract Is Not In Place...........................
5.6 Lease Continuation in Less Than Total or
Constructive Total Loss............................
6 Events of Default; Remedies..................................
(a) Events of Default........................................
(b) Remedies.................................................
ii
7 Limitation of Liability and Indemnification .................
7.1 Limitation on Lessor's Liability.....................
7.2 Lessee's Indemnification of Lessor...................
7.3 No Consequential, Etc. Damages.......................
7.4 Employees of Lessor..................................
8 Subordination and Assignment ................................
8.1 Security Interests and Secured Parties...............
8.2 Lessor's Right To Assign.............................
8.3 Lessee Assignment....................................
9 Guarantee of Lessee's Obligations ...........................
10 Representations and Warranties of AMSC and AMSC Parent.......
10.1 AMSC................................................
10.2 AMSC Parent.........................................
11 No Warranties and Representations Relating to the Satellite .
11.1 No Warranties......................................
12 Representations and Warranties of Lessee.....................
12.1 Lessee..............................................
13 General Provisions ..........................................
13.1 Binding Effect......................................
13.2 Third-Party Rights; Relationship of Parties.........
13.3 Notices.............................................
13.4 Waiver of Breach/Remedies...........................
13.5 Applicable Law......................................
13.6 Dispute Resolution..................................
13.7 Counterparts and Formal Date........................
13.8 Captions............................................
13.9 Entire Understanding................................
13.10 Dollar Amounts.....................................
13.11 Lessee's Payment Obligations.......................
13.12 Guarantee of Lessor's Obligations..................
13.13 Technical Operations Committee.....................
13.14 Lease Characterization.............................
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Exhibits
Exhibit A: Certain Defined Terms
Exhibit B: Form of Certificate of Lessee [and Guarantor]
Exhibit C: Form of Guarantee
Exhibit D: Choice of Law Agreement
Schedules
Schedule 1.3 Wire Transfer Instructions of the Lessor
Schedule 2.1 Satellite Relocation, Acceptance and Test Plan
Schedule 2.3 Lessee's TT&C Facilities and Services
Schedule 3.8 Reporting Schedule
Schedule 3.12 Officers and Directors Placing Securities in Escrow
Schedule 5.1 and 5.2 Government Approvals and Consents to Relocate
the Satellite and Consummate the Lease Transactions
Schedule 10.1 AMSC Consents
Schedule 10.2 AMSC Parent Consents
Schedule 12.1(d) Lessee Consents
Schedule 12.1(e) Founders and Their Ownership Interests
iv
SATELLITE LEASE AGREEMENT
This SATELLITE LEASE AGREEMENT ("Lease") is made as of the 2nd day of
December, 1997, by and among AMSC Subsidiary Corporation, a corporation
incorporated under the laws of Delaware, with offices located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("AMSC" or "Lessor"); American Mobile
Satellite Corporation, a Delaware corporation ("AMSC Parent"); and African
Continental Telecommunications Ltd., a Gibraltar
company ("Lessee").
Capitalized terms used in this Lease and not defined elsewhere in this
Lease shall have the meanings set forth in Exhibit A.
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RECITALS:
1. AMSC is the owner and operator of the Satellite known as "AMSC-1" or
"MSAT-2," which is currently located in geosynchronous orbit at 101(degree) West
Longitude.
2. The Lessee wishes to lease the Satellite from the Lessor and relocate
it to the Relocated Orbital Position.
3. The Lessor is entering into a Purchase Agreement (the "Purchase
Agreement") with TMI Communications and Company, Limited Partnership ("TMI")
pursuant to which the Lessor will purchase a one-half undivided interest in
TMI's satellite and transfer all telecommunications traffic on the Satellite to
the TMI Satellite on or prior to the relocation of the Satellite to the
Relocated Orbital Position.
4. The parties are entering into this Lease to set forth their
agreement as to the terms and conditions upon which the Lessee shall lease the
Satellite from the Lessor.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Satellite Lease Agreement
-- General Terms
-------------------------
1.1 Satellite Lease Agreement. Subject to the terms and conditions of
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this Lease, the Lessor shall lease the Satellite to the Lessee.
1.2 Term
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(a) Initial Lease Term. The initial term of the Lease (the "Initial
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Lease Term") shall commence on the Start Date and shall terminate on the fifth
anniversary of the Start Date, unless this Lease is earlier terminated pursuant
to Section 5.
(b) Renewal. By written notice given no later than the date which
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is two years and one hundred eighty-three days after the Start Date (and
provided this Lease has not earlier been terminated pursuant to Section 5), the
Lessee shall have the right to extend the term of the Lease to the End of
Life of the Satellite (the "Renewal Term"), provided that there is not as of the
giving of such written notice an Event of Default, and there is not as of the
end of the Initial Lease Term an Event of Default. The Renewal Term shall be
governed by all of the same terms and conditions of this Lease. "Lease Term"
shall mean the Initial Term and, if extended as provided herein, the Renewal
Term.
1.3 Payments From Lessee
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1.3.1(a) Lease Payments During Lease Term. In consideration of the
--------------------------------
lease of the Satellite to the Lessee during the Initial Term, the Lessee shall
pay the Lessor an aggregate of One Hundred Ninety Million Dollars ($190,000,000)
consisting of annual Lease payments of Thirty-Eight Million Dollars
($38,000,000) (net of all taxes, assessments, charges, levies or duties as
provided in Section 1.3(h) of this Lease). Lease payments shall be deemed to
include payments owed to AMSC as consideration for the license of intellectual
property and software owned by AMSC and licensed to the Lessee pursuant to the
separate License Agreement being entered into simultaneously herewith.
1.3.1(b) Initial Payment. On the Satellite Contract Date, the
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Lessee shall pay the initial Seven Million Five Hundred Thousand Dollar
($7,500,000) portion of the Initial Payment to the Lessor, and no later than the
date forty-five (45) days after the Satellite Contract Date, the Lessee shall
pay the remaining Two Million Five Hundred Thousand Dollar ($2,500,000) portion
of the Initial Payment to the Lessor.
1.3.1(c) Post-Offering Payment. Within ten (10) days after
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successful completion of the Offering, the Lessee shall make the Post-Offering
Payment to the Lessor.
1.3.1(d) Initial AMSC Payment Expenses. On the Start Date, the
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Lessee shall pay to AMSC an amount equal to the Initial AMSC Payment Expenses
that the Lessee has theretofore directed to be made by the Lessor, as presented
in writing to the Lessee by AMSC, with such reasonable backup documentation as
may be reasonably requested by the Lessee.
1.3.1(e) Treatment of Initial Payment, Post-Offering Payment
and Initial AMSC Payment Expenses
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(i) Except to the extent another disposition of such amounts
is provided for in this Lease, the Initial Payment and the Post-Offering Payment
shall be applied against and up to the amount of future lease payments in
reverse order from the end of the Lease Term as they are owed pursuant to this
Lease (if the renewal option referred to in Section 1.2(b) is exercised, the
Initial Payment and the Post-Offering Payment shall be applied to the last year
of the Renewal Term).
(ii) The Initial Payment, the Post-Offering Payment and the
Initial AMSC Payment Expenses shall be the property of the Lessor and are
nonrefundable except as provided in Section 5 of this Lease.
1.3.1(f) Manner of Payment. Lease payments shall be due and
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payable to the Lessor quarterly in arrears on the last day of March, June,
September and December during the Lease Term. The initial quarterly Lease
payment and the final quarterly Lease payment shall be prorated as appropriate
to reflect the actual number of days in that payment period, if such period is
less than a full calendar quarter. Amounts due and payable to the Lessor
pursuant to this Lease shall be paid to the Lessor's account in the United
States, or upon Lessor's direction to an account in Canada, and in the manner
provided on Schedule 1.3 or in such other manner as may be designated from time
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to time by the Lessor. All payments by the Lessee shall be deemed to be made
only upon receipt of collected funds.
1.3.1(g) Late Payment. Any payment due from the Lessee to the
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Lessor that is not received by the Lessor on the date that it is due shall be
subject to a late payment charge at a rate of one percent (1.0%) per month on
such overdue amount from the due date until it is actually received, provided
that if payment is received within five (5) days of the due date, interest shall
not be due from the Lessee as a result of the late payment.
1.3.1(h) Taxes. The Lessee shall indemnify and hold harmless the
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Lessor for any and all taxes, assessments, charges, levies or duties ("Taxes")
which may be asserted by any local, state or national governmental entity as a
result of the Lease other than any such Taxes imposed on the gross or net income
of the Lessor or Taxes in the nature of franchise or doing business Taxes which
would not have been imposed on the Lessor but for the activities of the Lessor,
other than in connection with the Lease, with the exception of any income taxes
imposed on the Lessor in its home jurisdiction. The Lessor shall cooperate with
the Lessee at Lessee's reasonable request to make such filings as may be
necessary or appropriate to recover taxes pursuant to this Section that can be
rebated only to the Lessor or with Lessor's assistance and upon any such rebate
to the Lessor shall pay over such rebate to the Lessee. If the Lessor is
required by law to pay or pays any such Taxes, the Lessee shall promptly
reimburse the Lessor for such payments within thirty (30) days from the date of
Lessor's invoice to the Lessee for same, provided that the Lessor shall, to the
extent reasonably practicable, give the Lessee reasonable advance notice of the
Lessor's proposed payment of such Taxes and the Lessee shall have fifteen (15)
days after receipt of such notice to give the Lessor written notice that the
Lessee requests that the Lessor not pay such claim and that the Lessee shall
undertake the contest of such Taxes (with counsel subject to the Lessor's
consent, not to be unreasonably withheld, and with the Lessor having the right
to participate in such contest at its own expense) and shall indemnify the
Lessor for any Taxes or other amounts which may be due by the Lessor (including
amounts due as a result of delay in payment and contest), provided further that
the Lessee shall have no such right to require the Lessor not to pay such Taxes
and to assume control of the contest if the failure to pay the Taxes and to
contest involves any risk of criminal liability to the Lessor or other harm to
the Lessor or the Lessor's business which harm to the Lessor it is reasonably
determined may not be adequately compensated for by the payment of money
pursuant to the indemnification provided in this Section. In the event the
Lessor does business in Africa other than in connection with this Lease and
transactions related to this Lease, and as a result of which conduct business
Taxes are imposed on the Lessor, the Lessor, and not the Lessee, shall be
responsible for such Taxes. Notwithstanding the foregoing, the Lessee shall not
be required to indemnify the Lessor for Taxes that would not have been imposed
but for the gross negligence or willful misconduct of the Lessor.
1.4 Return or Retirement of Satellite
Upon Expiration of Lease Term
or Termination of Lease
---------------------------------
1.4.1(a) Upon the expiration of the Lease Term, the Lessor shall
remove the Satellite from the Relocated Orbital Position and shall, at the
option of the Lessor and, except as provided in this Lease, at Lessor's risk,
either relocate the Satellite to the Returned Orbital Position or retire the
Satellite by removing it from geostationary orbit; provided that if at the end
of the Renewal Term, if the relocation or removal of the Satellite results in a
collision to another satellite and the Lessee is not at fault, then the Lessor
shall indemnify the Lessee from any claims with respect to such damage; provided
further that in no event shall the Lessor have any liability to the Lessee, the
Lessee's customers or suppliers, or any other person related to the Lessee. The
Lessor shall have the sole right to determine whether the Satellite is to be
returned or retired, and shall use its best efforts to notify the Lessee of its
choice nine (9) months prior to the expiration of the Lease Term. The Lessee
shall be responsible for the costs associated with the removal or relocation of
the Satellite in an amount not to exceed Six Hundred Thousand Dollars
($600,000), and assuming a rate of drift no slower than one degree of longitude
per day, provided that Lessee's responsibility hereunder shall not exceed one
hundred twenty (120) days at the Lessee's expense.
2. Steps To Be Taken Before
Relocation of Satellite
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2.1 Relocation of Satellite. The relocation shall be in accordance
-----------------------
with the Satellite Relocation Plan attached to this Lease as Schedule 2.1. The
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Relocation Commencement Date will begin within twenty-one (21) days after the
Satellite Relocation Date, adjusted for delays not caused by the Lessor. The
rate of drift of the Satellite shall be at no more than one degree of longitude
per day.
2.2 In-Orbit Insurance.
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2.2.1(a) The Lessor shall exercise reasonable commercial
efforts to obtain in-orbit insurance for the Satellite from the Start Date
(including coverage of drift and inversion) on substantially the terms of, and
at a premium rate not in excess of the premium rate under, the Lessor's in-orbit
insurance policy in effect for the Satellite as of October 4, 1997, a copy of
which shall be delivered to the Lessee in connection with the execution of this
Lease (with additional endorsements consistent with this Section 2.2 and Article
5) and in the aggregate amount of $150,000,000; provided that the Lessor may for
its own account obtain insurance in excess of such $150,000,000, and provided
further that as of the On Station Acceptance Date, the Lessor's only obligation
to the Lessee with respect to in-orbit insurance shall be to maintain insurance
in amounts for which the Lessee is to be the beneficiary (i.e., up to Fifty
Million Dollars ($50,000,000)). The Lessor shall make the Lessee the beneficiary
for one-third of the amount of such $150,000,000 (if available) of insurance,
provided that in the event that a lesser amount of insurance is available on
commercially reasonable terms (including as a result of diminished insurable
Satellite value over time), the Lessee shall be named beneficiary for one-third
of such lesser amount. In the event the Lessor determines that insurance on such
terms and such amount is unavailable, the Lessor shall not be required to insure
either its own interest or the Lessee's interest in the Satellite. The Lessee
and the Lessor shall each cooperate and take such actions as may be requested by
the other in connection with securing the insurance and complying with all
insurance policies secured. The in-orbit insurance policies shall provide that
to the extent proceeds are paid under the policies and the Lessee has breached
policy requirements or if an Event of Default under Sections 6(a)(i), (v) or
(vii) has occurred, the Lessor shall be entitled to the Lessee's interest in the
policy and proceeds thereof, which shall be paid to the Lessor, provided that in
the event of an Event of Default under Section 6(a)(i) or 6(a)(v), the Lessor
shall be entitled only to amounts owing and remaining to be owed to the Lessor
under or in connection with the remainder of the Lease.
2.2.1(b) The Lessor shall bear the premium and expenses of
insurance on the Lessee's interest.
2.3 Lessee to Secure TT&C Facilities and Service to Receive and
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Operate Satellite.
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2.3.1(a) The Lessee shall design and build TT&C facilities in
accordance with the requirements set forth on Schedule 2.3.
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2.3.1(b) The Lessee shall arrange to obtain TT&C Services
from a provider and pursuant to terms and conditions acceptable to the Lessor
to enable the Satellite to be received and operated at the Relocated Orbital
Position during the Lease Term.
3. Obligations and Covenants of Lessee
-----------------------------------
The Lessee hereby agrees and covenants with the Lessor that the Lessee
shall faithfully and diligently perform, at the Lessee's sole cost and expense,
each of the covenants set forth in this Lease, including without limitation,
those set forth in this Section 3.
3.1 Enabling the Satellite to Continue to Occupy Relocated Orbital
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Position. The Lessee shall satisfy all Applicable Legal Requirements (other than
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FCC and Canadian government approvals and any other Applicable Legal
Requirements that the Lessor is responsible for satisfying) to enable the
Satellite to occupy and operate from the Relocated Orbital Position throughout
the Lease Term, and shall provide the Lessor with quarterly status reports and
evidence as to the Lessee's satisfaction of such obligation promptly at the end
of each calendar quarter during the Lease Term.
3.2 Notice of Problems Involving Satellite. Throughout the Lease Term,
--------------------------------------
the Lessee shall as promptly as practicable provide written notice to the Lessor
of any performance problems or anomalies with respect to the Satellite of which
the Lessee is aware.
3.3 Use of Fully-Qualified Personnel. Throughout the Lease Term, the
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Lessee shall permit only fully-qualified personnel to operate the Satellite or
be involved in communications to or from the Satellite; for this purpose,
"fully-qualified personnel" shall be deemed to be those personnel with
substantially the level and quality of experience and background, and in
substantially equivalent numbers, as are employed or under contract in like
activities on behalf of the Lessor with respect to the Satellite on the date
hereof and including, without limitation, Telesat personnel.
3.4 Satellite Operation: Compliance With Specified Operating Procedures
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and Applicable Legal Requirements. Throughout the Lease Term, the Lessee shall
----------------------------------
operate the Satellite and install, operate and maintain in good working order
ground facilities and equipment for transmitting signals to, and receiving
signals from, the Satellite ("Lessee-Provided Facilities") in compliance with
all applicable Satellite operating procedures and operational limitations, if
any, issued by the Satellite's manufacturer and/or subcontractors, as well as
Applicable Legal Requirements now or hereafter existing or arising and pursuant
to such additional requirements as may be reasonably directed by the Lessor to
ensure the health and safe operation of the Satellite.
3.5 TT&C
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3.5.1(a) Throughout the Lease Term, the Lessee shall maintain or
cause to be maintained TT&C facilities from which to control the operation of
the Satellite and provide or cause to be provided TT&C Services for the
Satellite that are of a quality and level consistent with satellite industry
standards, and consistent with the terms and requirements set forth in this
Lease.
3.5.1(b) Without limiting the obligation of the Lessee as set out
in Section 3.5(a) above, the Lessee acknowledges and agrees that the Lessor may
at any time, and from time to time, when the Lessor determines, through action
of an executive officer of the Lessor, that, absent such intervention, a
reasonable fully-qualified person would determine that it is necessary or
appropriate for the health or safe operation of the Satellite, when an Event of
Default has occurred or when this Lease has otherwise terminated, assume control
for directing the activities of the TT&C Services provider under the TT&C
Services contract with respect to the Satellite, without incurring liability of
any kind to the Lessee, except for the Lessor's gross negligence or willful
misconduct, it being agreed that actions taken under the direction of an
executive officer of the Lessor will not constitute gross negligence. Except in
situations involving the health or safety of the Satellite or an Event of
Default, Lessor shall endeavor to minimize the adverse impact of such activities
on the Lessee's business. For this purpose, the Lessee hereby irrevocably and
unconditionally appoints and authorizes the Lessor individually as its attorney
to issue to the Lessee's TT&C Services provider (or any successor or assign of
such TT&C Services provider) any or all commands, directions and instructions,
and provide all data as is necessary or desirable for the performance of TT&C on
the Satellite. The Lessee further acknowledges and agrees to execute
simultaneously with the signing of this Lease a letter to the Lessee's TT&C
Services provider in form and substance satisfactory to the Lessor, acting
reasonably, which confirms the authority granted to the Lessor pursuant to this
Section 3.5(b). The obligation to pay the Lessee's TT&C Services provider for
TT&C Services under the TT&C Services contract (or otherwise) shall at all times
and under all circumstances remain with the Lessee.
3.6 Frequency Coordination. Throughout the Lease Term, the Lessee shall
----------------------
coordinate electromagnetic spectrum for the operation of the Satellite at the
Relocated Orbital Position and shall satisfy all Applicable Legal Requirements
and established practices and procedures for such coordination. The Lessor shall
have the right to monitor the coordination process, including the right to
attend frequency coordination meetings (which shall be at the expense of the
Lessee if, in the Lessee's reasonable judgment, such attendance is required by
Applicable Legal Requirements, but otherwise, at the expense of the Lessor). The
Lessee shall provide the Lessor with quarterly reports as to the coordination
process and shall provide evidence reasonably acceptable to the Lessor that
Applicable Legal Requirements with respect to coordination have been satisfied.
3.7 Safe Operation. Throughout the Lease Term and until such time (if
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any) as the Satellite is removed from the Relocated Orbital Position, the Lessee
shall not operate or use the Satellite or any portion thereof in a manner which
would or could reasonably be expected to:
(i) damage the Satellite;
(ii) damage any other in-orbit satellite or any portion
thereof; or
(iii) interfere with the use or operation of any other
satellite or any portion thereof.
3.8 Reporting. During the Lease Term, the Lessee shall provide the
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information described in, and on the frequency set forth in, Schedule 3.8, in
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such form and specificity as would be standard under similar circumstances in
the satellite industry. In addition, during the Lease Term, the Lessee shall
provide additional reports relating to any events or anomalies relating to the
Satellite as may be reasonably necessary or appropriate (i) for the Lessor to
evaluate whether performance incentive payments are due to the Satellite's
manufacturers with respect to the Satellite and to take action with respect
thereto, (ii) for securing and maintaining insurance covering the Satellite,
(iii) in connection with the Lessor's financial transactions, reporting
obligations under Applicable Legal Requirements and the preparation of
disclosure documents pursuant to Applicable Legal Requirements, (iv) to comply
with Applicable Legal Requirements, and (v) for other reasonable purposes. The
Lessor acknowledges that the Lessee shall not be responsible for performance
incentive payments due to the Satellite's manufacturer.
3.9 Government Approvals For Use of Satellite, Etc. Except as noted in
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Section 3.1 about FCC and Canadian government approvals, the Lessee, and not the
Lessor, shall have responsibility for obtaining and maintaining all necessary
approvals of governmental entities and international organizations to use the
Satellite, including but not limited to rights to the Relocated Orbital
Position, securing rights to use the coordinated L-band and Ku-band frequencies
suitable for the Satellite, and all approvals needed to operate the TT&C
facilities and provide the TT&C Services contemplated to be provided by the
Lessee by this Lease. The Lessor shall cooperate with the Lessee in all
reasonable respects in Lessee's efforts to secure and maintain such approvals.
3.10 Additional Guarantees. If, in the opinion of the Lessor, the
----------------------
additional financial assurances of one or more parents or subsidiaries of the
Lessee are reasonably required, then upon the request of the Lessor, the Lessee
shall obtain a written guarantee, substantially in the form of the guarantee
referred to in Section 9 of this Lease, from such parents and/or subsidiaries.
3.11 Cooperation and Support in Obtaining and Maintaining Insurance.
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The Lessee shall cooperate with the Lessor in the process of obtaining and
maintaining insurance relating to the Satellite, including in-orbit insurance.
The Lessee shall provide the Lessor access to all technical information and
reports it may have, or may obtain, from Lessee's own technical staff or outside
contractors which may reasonably be required in order to obtain and maintain
insurance on the most beneficial terms to the Lessor or the Lessee. The Lessee
shall also provide the Lessor reasonable access to its satellite technical staff
or outside contractors for purposes of insurance presentations or claim
prosecution.
3.12 Additional Financial Obligations and Covenants
----------------------------------------------
The Lessee hereby agrees and covenants with the Lessor that it shall
faithfully and diligently perform, at its cost and expense, each of the
covenants set forth in this Section 3.12.
3.12.1(a) Delivery of Business Plan. The Lessee shall deliver to
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the Lessor on or prior to the date hereof, a copy of the Lessee's final business
plan, which shall address the business of the Lessee and affiliates through the
end of the Initial Lease Term (the "Business Plan");
3.12.1(b) Delivery of Financial Information. The Lessee shall
------------------------------------
deliver to the Lessor:
(i) Within 120 days of the end of each fiscal year of
the Lessee, the Lessee's annual audited consolidated financial
statements, showing the consolidated financial condition and
results of operations of the Lessee and its Subsidiaries for such
fiscal year, prepared in accordance with GAAP and accompanied by an
unqualified opinion thereon by a firm of independent certified
public accountants;
(ii) Within 45 days of the end of each half year of the
Lessee's fiscal year, the unaudited consolidated financial
statements of the Lessee showing the consolidated financial
condition and results of operations of the Lessee and its
Subsidiaries for such half year, together with a certificate of an
officer of the Lessee that such financial statements have been
prepared in accordance with GAAP;
(iii) Within 30 days of the end of each month, such monthly
financial reports as are ordinarily prepared for the senior
management or Boards of Directors of the Lessee showing their
consolidated financial condition and results of operations for the
preceding month;
(iv) Within 30 days of its adoption, but in any case no
later than 30 days after the start of the Lessee's fiscal year, a
copy of the annual consolidated budget of the Lessee and its
Subsidiaries for such fiscal year; and
(v) Within 10 days of their distribution to the
stockholders of the Lessee, copies of any circulars or other
documents or information that are distributed by the Lessee to its
stockholders.
3.12.1(c) Actions Requiring Approval of Lessor During Start-up.
----------------------------------------------------
Until Net Services Revenue exceeds the annual Lease payment, neither the Lessee
nor any Guarantor under Section 9 shall take any of the following actions
without the Lessor's written approval in advance, which approval shall not be
unreasonably withheld:
(i) Fund any capital expenditure in excess of Five Million
Dollars related to any Second Generation Satellite other than
through Subsequent Financing;
(ii) Make an acquisition or investment with a value in
excess of Five Million Dollars in another company or business
(whether by the acquisition of stock or any other interest, or the
acquisition of assets), or otherwise enter into any business,
other than as contemplated by the Business Plan or entirely
through Subsequent Financing; or
(iii) Declare or pay any dividends.
3.12.1(d) Other Actions Requiring Approval of Lessor. During
-------------------------------------------
the Term of the Lease, neither the Lessee nor any Guarantor under Section 9
shall take any of the following actions without the Lessor's written
approval in advance, which approval shall not be unreasonably withheld:
(i) Incur any debt whose obligations would rank senior to
the payment obligations of the Lessee pursuant to the Lease; or
(ii) Sell, lease, transfer or otherwise dispose of any
assets other than in the ordinary course of business.
3.12.1(e) Resolution of Disputes. The parties to this Lease
----------------------
confirm that, in the event of a dispute over the applicability of Sections
3.12(c) or (d), including the need for and reasonableness of Lessor approval,
the expedited arbitration procedures of Section 13.6 shall be used.
3.12.1(f) Escrow of Securities. Immediately prior to the
----------------------
Offering, the Lessee shall cause each of the officers and directors named in
Schedule 3.12, as holders of the issued and outstanding shares of the equity
-------------
securities of the Lessee and any Guarantor, to place their respective shares of
the Lessee and any Guarantor in escrow with a financial institution and on terms
reasonably acceptable to the Lessor; provided that with respect to each of these
officers and directors:
(i) One half of their shares of such equity securities
shall be released from escrow on the Release Date; and
(ii) All of their remaining shares of such equity
securities shall be released one year after the Release Date.
(iii) It is understood that only shares issued to the
named officers and/or directors as of the Offering date will be
included in this escrow. Any shares issued subsequent to the
Offering to one of the officers or directors covered by this
clause either by purchase or pursuant to an employee stock option
plan shall not be covered by this escrow.
3.12.1(g) Definitions. For purposes of this Section 3.12, the
-----------
following terms shall have the following meanings:
"GAAP" shall mean generally accepted accounting principles
----
consistently applied in the United States.
"Net Services Revenue" shall mean the amount recognized under
---------------------
GAAP as revenue earned by the Lessee from the sale of the
Satellite's services during the Lessee's preceding four fiscal
quarters, less any allowance for bad debts. Net Services Revenue as
defined herein shall exclude any revenue, income or dividends of
Lessee's service providers even if Lessee has an investment
therein.
"Release Date" shall mean the later of the Commercial Service
------------
Date or the first anniversary of the Offering.
"Second Generation Satellite" shall mean any satellite other
-----------------------------
than the Satellite that is operated by the Lessee or its
Subsidiaries or that the Lessee or its Subsidiaries intend to
operate.
"Subsequent Financing" shall mean debt or equity financing
---------------------
obtained after the Offering.
4. Other Rights and Obligations of Lessor
--------------------------------------
4.1 Rights. From the date hereof and throughout the Lease Term, the
------
Lessor shall have the following specific rights, in addition to any other rights
the Lessor may have under applicable law.
4.1.1(a) Inspection. The Lessor shall have the right, but not the
----------
obligation, to inspect all TT&C facilities and Lessee-Provided Facilities and
associated facilities and equipment which are used by the Lessee (or by a third
party under the authority of the Lessee) to transmit signals to and receive
signals from the Satellite. Such inspections shall be at the Lessor's expense,
shall be conducted during normal business hours, and shall be conducted so as
not to unreasonably interfere with Lessee's business. The Lessor shall provide
the Lessee reasonable advance notice of such inspections.
4.1.1(b) Action to Protect Satellite. Without limiting the
------------------------------
generality of Section 3.5(b) above, if circumstances occur which, in the
Lessor's reasonable judgment, pose a threat to the health or safety of the
Satellite, the Lessor shall have the right, by direction of an executive officer
of the Lessor, to take appropriate action to protect the Satellite, including
without limitation issuing binding commands, directions and instructions to
Lessee's TT&C Services provider, and to provide to such TT&C Services provider
all data as necessary to meet any performance specifications applicable to the
Satellite and/or to safeguard the health of the Satellite, without the Lessor
incurring any liability to the Lessee, except for the Lessor's gross negligence
or willful misconduct, it being agreed that actions taken under the direction of
an executive officer of the Lessor will not constitute gross negligence. To the
extent reasonably practicable, the Lessor shall provide the Lessee with prior
notice of any such action it proposes to take.
4.1.1(c) Testing. Without the Lessor incurring liability to the
-------
Lessee, the Lessor shall have the right to suspend Lessee's communications with
the Satellite on such notice as is reasonable under the circumstances for
purposes of testing in connection with a failure or suspected failure of a
component or subsystem of the Satellite or in response to an order of a court or
governmental agency, or to determine the cause or source of any interference.
Except in situations involving the health or safety of the Satellite or an Event
of Default, the Lessor shall endeavor to minimize the adverse impact of such
activities on the Lessee's business.
4.2 Certain Responsibilities of Lessor.
----------------------------------
4.2.1(a) Documentation. The Lessor shall provide the Lessee with
-------------
the documentation it uses to operate the Satellite, subject to applicable export
control and other Applicable Legal Requirements, approvals for which shall be
the responsibility of the Lessor at Lessor's expense.
4.2.1(b) Performance Tests. The Lessor shall perform the North
------------------
American Performance Tests and the African Performance Tests in accordance with
the Test Plan included in Schedule 2.1 and shall provide the Lessee with a
written report of the results of such Performance Tests within fourteen (14)
days after completion of the applicable Performance Tests.
4.2.1(c) U.S. and Canadian Government Approvals For Relocation and
----------------------------------------------------------
Export of the Satellite. The Lessor, and not the Lessee, shall have
--------------------------
responsibility for obtaining and maintaining all necessary U.S. and Canadian
government approvals (including FCC and export control approvals) for the
relocation and export of the Satellite to the Relocated Orbital Position. The
Lessee shall cooperate with the Lessor and supply such information and other
assistance as the Lessor may reasonably request in the Lessor's efforts to
obtain and maintain such approvals.
4.2.1(d) Timing of Delivery of Satellite. The Lessor shall use
---------------------------------
best efforts to deliver the Satellite to the Relocated Orbital Position within
twelve (12) to fifteen (15) months after the Start Date, such period to be
adjusted for delays not caused by the Lessor, including but not limited to
regulatory delays in securing approvals for relocation and export of the
Satellite and delays due to the Lessee's failure to perform any of its
obligations under this Lease.
5. Termination Rights; Effect of Termination; Lease Continuation
-------------------------------------------------------------
5.1 Lessee's Right to Terminate in Certain Circumstances
----------------------------------------------------
(a) The Lessee shall have the right to terminate the Lease in
the following circumstances:
(i) If the Lessor fails despite its reasonable commercial
efforts to obtain all necessary American and Canadian government
approvals or consents to relocate the Satellite or to consummate
the transactions contemplated hereby on or before March 15, 1998
(attached to this Lease at Schedule 5.1 is the Lessor's current
-------------
understanding of such approvals and consents); or
(ii) By written notice given within seven (7) days
after receipt of the North American Performance Tests report
pursuant to Section 4.2(b), if the report demonstrates that the
Satellite does not meet the Minimum Performance Specifications; or
(iii) If the Lessor suffers a Bankruptcy Event on or before
the Relocation Commencement Date; or
(iv) If in-orbit insurance on the terms set forth in
Section 2.2 is not secured by the Start Date.
(b) If the Lease is terminated pursuant to Section 5.1(a)
above, the Lessor shall refund to the Lessee the difference between (i) all
Lease payments made by the Lessee, including the Initial Payment and the
Post-Offering Payment, less (x) the Initial AMSC Payment Expenses and CMIS
Expenses, (y) the unreimbursed Space Segment Expenses, and (z) $5,000,000
in the case of a termination under Section 5.1(a)(ii)-(iv), and (ii) any
insurance paid or payable to the Lessee in respect of the event giving rise to
termination of the Lease, and all Ground Segment Contracts (except for the
License Agreement in accordance with its terms) to which the Lessor is party
shall automatically and simultaneously terminate without penalty to the Lessor.
The parties acknowledge that such amount is a reasonable pre-estimate of the
damages suffered by the Lessor or the Lessee, as the case may be, in the event
of such termination, and the costs and expenses incurred by the Lessor or the
Lessee, as the case may be, in pursuing this transaction.
5.2 Lessor's Right to Terminate in Certain Circumstances
----------------------------------------------------
(a) The Lessor shall have the right to terminate the Lease in
the following circumstances:
(i) If the Lessor fails despite its reasonable commercial
efforts to obtain all necessary American government approvals or
consents to relocate or sell its interest in the Satellite or
to consummate the transactions contemplated hereby on or before
April 30, 1998 (attached to this Lease at Schedule 5.2 is the
-------------
Lessor's current understanding of such approvals and consents); or
(ii) If the Lessor fails despite its reasonable
commercial efforts to obtain all necessary Canadian and American
government approvals or consents to relocate the TMI Satellite
or to consummate the transactions contemplated by the Purchase
Agreement on or before April 30, 1998 (attached to this Lease at
Schedule 5.2 is the Lessor's current understanding of such
------------
approvals and consents); or
(iii) If there is a material adverse change in the
condition of the TMI Satellite prior to the Relocation Commencement
Date; or
(iv) Subject to clause (d) below, if in-orbit insurance on
the terms set forth in Section 2.2 is not secured by the Start
Date.
(b) If the Lease is terminated pursuant to Section 5.2(a)
above, the Lessor shall refund to the Lessee the difference between (i)
all Lease payments made by the Lessee, including the Initial Payment and the
Post-Offering Payment, less the Initial AMSC Payment Expenses and CMIS
Expenses and less the unreimbursed Space Segment Expenses, and (ii) any
insurance paid or payable to Lessee from insurance maintained by the Lessor
pursuant to Section 2.2 in respect of the event giving rise to termination
of the Lease, and all Ground Segment Contracts (except for the License
Agreement in accordance with its terms) to which the Lessor is party shall
automatically and simultaneously terminate without penalty to the Lessor.
(c) At Lessee's request and expense, the Lessor shall use
commercially reasonable efforts to secure insurance of up to $15,000,000 in
favor of the Lessee to cover damages and loss associated with the ground
segment portion of its System in the event of a material adverse change in the
condition of the TMI Satellite prior to the Relocation Commencement Date.
(d) If the Lease is terminated pursuant to Section 5.2(a)(i),
(ii) or (iv) above, the Lessor agrees not to sell or lease the Satellite to
a third party for one year after such termination.
5.3 Lessor's Right to Terminate in Certain Additional Circumstances.
---------------------------------------------------------------
(a) The Lessor shall have the right to terminate the Lease in
the following circumstances:
(i) If by the date seventy-five (75) days after the date of
this Lease (A) the Lessee has not received and delivered to the
Lessor formal, written permission from the South Africa Reserve
Bank to do the Offering on the Johannesburg stock exchange or
(B) a mutually acceptable alternative Offering for which the
South Africa Reserve Bank approval is not required is not agreed
upon between the Lessee and the Lessor;
(ii) If the Offering has not closed on or before the later
of (A) June 30, 1998 and (B) the date which is seventy-five (75)
days following receipt by the Lessor of all necessary Canadian
and American government approvals to relocate the Satellite;
(iii) If the Post-Offering Payment has not been received on
or before ten (10) days after the date the Offering closes;
(iv) An Event of Default occurs and is continuing at the
time of termination on or before the Relocation Commencement Date;
(v) If the Lessee has not obtained final approval under
all Applicable Legal Requirements for the Satellite to occupy the
Relocated Orbital Position, including coordination of frequencies
for TT&C and initial operation, by April 30, 1998, provided,
however, that in the event and to the extent that a delay in
obtaining any given approval under an Applicable Legal Requirement
occurs and such delay does not, in the Lessor's reasonable
judgment, unreasonably delay the Lessee's beginning or successfully
maintaining commercial service, the Lessor shall not terminate the
Lease on the basis of such a delay; or
(vi) If the Lessee does not have by June 1, 1998
TT&C facilities in Chilworth operationally complete and ready to
control the Satellite, thus ensuring that the Lessee shall be in a
position to receive and operate the Satellite upon its relocation
by the Lessor to the Relocated Orbital Position.
(b) If the Lease is terminated pursuant to Section 5.3(a)
above, the Lessor shall be entitled to retain all Lease payments, including the
Initial Payment and the Post-Offering Payment, shall retain the Initial AMSC
Payment Expenses and CMIS Expenses and all Ground Segment Contracts (except for
the License Agreement in accordance with its terms) to which the Lessor is party
shall automatically and simultaneously terminate without penalty to the Lessor.
The parties acknowledge that such amount is a reasonable pre-estimate of the
damages suffered by the Lessor or the Lessee, as the case may be, in the event
of such termination, and the costs and expenses incurred by the Lessor or the
Lessee, as the case may be, in pursuing this transaction. The Lessee may retain
all work product funded by the Initial AMSC Payment Expenses, if any, which is
not based on or derived from AMSC owned or licensed proprietary software or
other information and consistent with the terms of the License Agreement; the
Lessee shall make provision for retention of third-party work product directly
with third-party vendors following termination as and if desired.
5.4 Lessor's and Lessee's Rights to Terminate in
Event of Total Loss or Constructive Total Loss
----------------------------------------------
(a) The Lessor and the Lessee shall each individually have the
right to terminate the Lease if, after the Start Date, the Satellite suffers a
Total Loss or Constructive Total Loss.
(b) If the Lease is terminated pursuant to Section 5.4(a) above
on or after the On Station Acceptance Date, the Lessee shall be entitled,
subject to the last sentence of Section 2.2(a), to all insurance proceeds
payable to the Lessee in accordance with Section 2.2(a) under the insurance
policies in respect of such loss, and the Lessor shall retain all Lease payments
made by the Lessee through the termination date, including the Initial Payment,
the Post-Offering Payment, the Initial AMSC Payment Expenses and CMIS Expenses,
and all Ground Segment Contracts (except for the License Agreement in accordance
with its terms) to which the Lessor is party shall automatically and
simultaneously terminate without penalty to the Lessor.
(c) I the Lease is terminated pursuant to Section 5.4(a) above
before the On Station Acceptance Date, the Lessee shall be named in the in-orbit
insurance policy in Section 2.2 as an additional loss payee for such additional
amount of insurance proceeds as necessary to enable the Lessee to recover an
amount equal to all Lease payments (but excluding any Initial AMSC Payment
Expenses, CMIS Expenses or Space Segment Expenses) theretofore made.
(d) If there is a Total Loss or Constructive Total Loss of the
Satellite but the Lease is not terminated by either of the Lessor or the Lessee:
(i) The Lease and all contracts relating to the ground
segment portion of the system between the Lessor and the Lessee
shall remain in force; and
(ii) The Lessor shall pay to the Lessee one-third of
all insurance proceeds paid or payable to the Lessee (with respect
to the $150,000,000 shared policy maximum, or such lesser amount
available under Section 2.2) (if any) in respect of such loss and
shall retain all Lease payments, including the Initial Payment, the
Post-Offering Payment, the Initial AMSC Payment Expenses and CMIS
Expenses; and
(iii) The Lessor and the Lessee shall enter into good
faith discussions as to any appropriate adjustment to the annual
Lease payment. If such damage or loss occurs prior to achieving
the On Station Acceptance Date at expected performance levels and
if the insurance proceeds received by the Lessee with respect to such
loss by the Lessee are not at least equal to the Lease payments
received by the Lessor to such date, then a retroactive Lease payment
adjustment for such difference shall be made, with such retroactive
adjustment to be paid to the Lessee equally over the remainder of the
Lease Term.
5.5 Lessor's Right to Terminate If Lessee's TT&C Contract
-----------------------------------------------------
Is Not in Place.
---------------
(a) The Lessor shall have the right to terminate the Lease if
the Lessee has not entered into an agreement with Telesat with respect to TT&C
services (substantially on the terms proposed by Telesat, but with the addition
of provisions relating to the Gibraltar earth station) for the on-station TT&C
operation of the Satellite over or near Africa within forty (40) days of
entering into this Lease.
(b) If the Lease is terminated pursuant to Section 5.5(a)
above, the Lessor shall refund to the Lessee all Lease payments made by
the Lessee, including the Initial Payment and the Post- Offering Payment,
less the Initial AMSC Payment Expenses, CMIS Expenses, unreimbursed Space
Segment Expenses and $1,000,000.
5.6 Lease Continuation in Less Than Total or Constructive Total Loss.
------------------------------------------------------------------
If, after the Start Date, the Satellite suffers damage or a loss of performance
(as determined under a mutually- agreed method but excluding normal in-orbit
deterioration) during the Lease Term, and if the damage or loss of performance
is not a Total Loss or Constructive Total Loss, then:
(i) the Lease, the Service Contract and the License
Agreement shall remain in force;
(ii) the Lessor shall pay to the Lessee one-third of
all insurance proceeds paid or payable to the Lessee (with respect
to the $150,000,000 shared policy maximum, or such lesser amount
available under Section 2.2) (if any) in respect of such loss,
shall retain all Lease payments, including the Initial Payment, the
Post-Offering Payment, the Initial AMSC Payment Expenses and the
CMIS Expenses; and
(iii) the Lessor and the Lessee shall enter into good
faith discussions as to an appropriate adjustment, if any, to
the annual Lease payment. If such damage or loss of performance
occurs prior to On Station Acceptance, any Lease payment adjustment
shall be retroactive with respect to Lease payments already made,
with such retroactive adjustment to be paid to the Lessee by way
of a credit prorated equally against the quarterly Lease payments
to be made by the Lessee to the Lessor over the remainder of the
Lease Term.
6. Events of Default; Remedies
---------------------------
(a) Events of Default. If one or more of the following events of
-----------------
default (each an "Event of Default") occurs and is continuing, the Lessors
shall be entitled to the remedies set forth in Section 6(b):
(i) Any amount payable by the Lessee hereunder is not paid
as and when it becomes payable within ten (10) days after notice
to the Lessee;
(ii) The Lessee or any Guarantor fails to perform or
observe any covenant or agreement to be performed or observed by
it, where such failure could reasonably pose a not immaterial
risk to the health or safe operation of the Satellite, and
does not remedy such failure (or otherwise remove such risk, in
which case the terms of paragraph (iii) of this Section 6(a) shall
apply) on or before the fifth (5th) day after written notice
thereof is given by the Lessor to the Lessee;
(iii) The Lessee or any Guarantor fails to perform or
observe any material covenant or agreement to be performed or
observed by it (other than those referred to in Section 6(a)(i),
6(a)(ii), 6(a)(iv), 6(a)(v) or 6(a)(vi)) and does not remedy the
failure on or before the thirtieth (30th) day after written notice
thereof is given by the Lessor to the Lessee;
(iv) Any material representation or warranty of the
Lessee or any Guarantor in this Lease or any other document
delivered in connection with this Lease proves to have been
incorrect, incomplete or misleading in any material respect at
the time it was made or repeated or deemed to have been made
or repeated, and shall not have been remedied within thirty
(30) days thereafter;
(v) If an Event of Bankruptcy shall occur with respect
to the Lessee or a Guarantor;
(vi) A failure by the Lessee to provide a certificate
in the form of Exhibit B to the Lessor within (5) business days
---------
following receipt of Lessor's written request prior to the
Satellite Relocation Date; and
(vii) a breach or default by the Lessee under Section 3.2,
3.3, 3.4, 3.5(a), 3.7 or 3.8 of this Lease and such breach or
default is a direct cause of a loss with respect to the
Satellite. (For purposes of this Section 6(a)(vii), "loss" means
any loss for which proceeds would be payable under the insurance
policy procured under Section 2.2 or if no such policy is in
place, then a loss for which proceeds would be payable under the
policy referred to in Section 2.2.) Notwithstanding the foregoing,
in the event of a breach or default that would otherwise
constitute an Event of Default under this Section 6(a)(vii),
but (A) the loss of the Satellite is a Partial Loss, (B) the
Lessor shall receive the insurance proceeds called for pursuant
to Section 2.2 or an equivalent amount and (C) there is no
reduction of the Lease payments under Section 5.6, then there
shall be no Event of Default.
(b) Remedies. If one or more Events of Default occurs and is
--------
continuing, the Lessor shall be entitled to:
(i) retain all amounts paid to the Lessor and retain
any insurance proceeds with respect to insurance maintained by
the Lessor pursuant to, and to the extent provided in, Section
2.2 otherwise payable to the Lessee;
(ii) exercise its rights under any cross-default provisions
under the Ground Segment Contracts, any credit support agreements
and other credit assurance mechanisms for any amounts owed to them,
and to recover expenses and damages;
(iii) sell or lease the Satellite to another customer
and/or remove the Satellite from the Relocated Orbital Position
at the Lessee's expense (whether or not resold or released); and
(iv) any other remedy available to Lessor under applicable
law.
The Lessor shall use commercially reasonable efforts to mitigate its
damages in the exercise of its remedies under this Section 6(b).
7. Limitation of Liability
and Indemnification
-----------------------
7.1 Limitation on Lessor's Liability. It is expressly agreed that,
----------------------------------
except with respect to acts or omissions of the Lessor constituting gross
negligence or willful misconduct, the sole obligations and liabilities of the
Lessor, and the exclusive remedies of the Lessee in relation to anything arising
out of the Lease, including without limitation Total Loss or Constructive Total
Loss of the Satellite, Partial Loss of the Satellite, or any other problem
associated with the Satellite (whether the basis of liability is breach of
contract, tort (including negligence and strict liability) statute or other
legal theory) are limited to those specified in Sections 2.1, 4, 5, 6 and this
Section 7 and all other remedies of any kind are expressly waived by the Lessee.
7.2 Lessee's Indemnification of Lessor
----------------------------------
7.2.1(a) The Lessee shall indemnify and hold harmless the Lessor,
AMSC, their respective Affiliates and their respective directors, officers,
employees, agents, shareholders, partners and subcontractors (the Lessor and
each such other person, an "Indemnified Party") from any and all claims,
liabilities, losses, costs, or damages, including attorneys' fees and costs of
investigation, incurred or suffered by any of them arising out of:
(i) any claims asserted against any Indemnified Party by
third parties arising out of activities of the Lessee or Lessee's
Agents or any violations of Applicable Legal Requirements by
the Lessee or Lessee's Agents (except to the extent arising out of
activities of the Lessor or Lessor's Agents in breach of this Lease
and any violations of Applicable Legal Requirements by the Lessor
or Lessor's Agents);
(ii) any third-party claim asserted by any customer or
supplier of the Lessee, which claim purportedly arises out of
any act or omission of any Indemnified Party in connection with
goods or services provided, in the case of a customer, by, and in
the case of a supplier, to, the Lessee unless such acts or
omissions are in breach of this Lease;
(iii) any other third party claims asserted against
any Indemnified Party in connection with a contract or
relationship between the Lessee or any of its related parties and
such third party, except to the extent caused by acts or omissions
of the Lessor;
(iv) the lease of the Satellite to the Lessee; or
(v) TT&C activities provided by or on behalf of the Lessee.
7.2.1(b) The Lessee shall, in each of its contracts with its
suppliers, customers, resellers, distributors or other vendors of its services
(in this Section 7.2(b), referred to as "the Party Contracting with the
Lessee"), insert a provision which reads substantially as follows:
"AMSC Subsidiary Corporation ('AMSC') and each of its affiliates,
officers, directors, employees, shareholders, partners,
investors, agents and subcontractors shall not be liable, for any
reason whatsoever, to [the Party Contracting with the Lessee], or
any of its affiliates, officers, directors, employees,
shareholders, partners, investors, agents or subcontractors, for
losses, damages, costs, expenses, liabilities or claims arising
out of:
"(i) the ownership of the Satellite by AMSC or any of its
successors and assigns;
"(ii) the provision of any goods or services by African
Continental Telecommunications Ltd., or its successors and
assigns to [the Party Contracting with the Lessee];
"(iii) any failure of performance of the Satellite,
including without limitation delays, in-service interruption,
degradation or loss or distortion of services."
7.2.1(c) Promptly after knowledge of any indemnifiable claim
hereunder, any affected Indemnified Party shall notify the Lessee in writing and
specify the amount and nature of such claim. If within thirty (30) days after
receipt of such notice the Lessee gives such Indemnified Party written notice
that (i) the Lessee intends to defend against such claim, at the sole cost and
expense of the Lessee, and (ii) the Lessee acknowledges that it is obligated to
provide indemnification to the Indemnified Party for such claim, then (so long
as such matter does not involve any risk of criminal liability to the
Indemnified Party, the loss of the Satellite by the Lessor or material risk to
the Satellite, the potential loss of Lessor's principal FCC license(s), or other
harm to the Indemnified Party (including with respect to intellectual property
rights of the Lessor or AMSC) or the Indemnified Party's business, including
matters relating to claims by government agencies with jurisdiction over the
Indemnified Party or by AMSC's shareholders and which harm to the Indemnified
Party reasonably may not be adequately compensated by the payment of money
pursuant to the indemnification provided in this Section), the defense of such
claim shall be by the Lessee (with counsel subject to the Lessor's consent, not
to be unreasonably withheld and with the Indemnified Party having the right to
participate in the defense at its own expense) and the Indemnified Party shall
make no payment on such claim so long as the Lessee is conducting a good faith
and diligent defense. Notwithstanding the foregoing, the Indemnified Party may
take such actions as it determines are reasonable or necessary prior to the
expiration of such thirty (30) day period in order to protect its rights. In
furtherance of the foregoing, the parties agree to cooperate with each other in
the defense of any such indemnifiable claim. If an Indemnified Party elects to
conduct its own defense, the Lessee may participate in the defense at its own
expense, provided that the Lessee shall nevertheless remain liable for all
costs, expenses, liabilities and damages incurred by such Indemnified Party
resulting from or arising out of such proceedings or investigations.
7.3 No Consequential, Etc. Damages. In no event shall (i) any
--------------------------------
Indemnified Party be liable, directly or indirectly, to the Lessee, or (ii) the
Lessee be liable, directly or indirectly, to the Lessor, any direct or indirect
users of the Satellite or any other person for any loss of profit, loss of
business, special, indirect, direct, incidental or consequential damages or loss
of revenues arising out of this Lease.
7.4 Employees of Lessor. Every right, exemption from liability, defense
-------------------
and immunity of whatsoever nature applicable to the Lessor or to which it is
entitled shall extend to protect every employee of the Lessor acting in the
course of, or in connection with, this Lease.
8. Subordination and Assignment
----------------------------
8.1 Security Interests and Secured Parties
--------------------------------------
8.1.1(a) The Lessee hereby acknowledges that this Lease and all
rights granted to the Lessee hereunder are subject and subordinate to (without
the necessity of having further instruments executed on the part of the Lessee
to effectuate such subordination) all security interests and liens whether now
existing or hereafter created granted heretofore or from time to time granted
hereafter by the Lessor (collectively, "Security Interest") in favor of its
creditors (the "Secured Parties") in and to the Lessor's interest in the
Satellite, this Lease, the proceeds of this Lease, the proceeds from the sale or
other disposition of all or any portion of the Satellite or this Lease, or any
insurance proceeds that may be paid or payable to the Lessor in regard to the
Satellite. The Security Interest shall be deemed to include interests under all
security agreements, indentures, mortgages, pledge agreements and other
collateral documents running in favor of Secured Parties, including all
renewals, modifications, consolidations or replacements thereto (collectively
the "Collateral Documents").
--------------------
Notwithstanding the existence of any Security Interests, the Lessee shall
continue to have the benefits of this Lease notwithstanding any default on the
part of the Lessor under any of the Collateral Documents, so long as no Event of
Default shall have occurred under the Lease.
8.1.1(b) Upon exercise by any Secured Party of any of its rights
and remedies under the Security Interests granted in its favor and receipt by
the Lessee of notice from any Secured Party of a default by the Lessor under the
Collateral Documents, the Lessee shall attorn, as the Lessee, to such Secured
Party, as lessor, upon all the terms of this Lease (including making all
payments which are then, or may thereafter become, due and owing hereunder after
such notice in the manner instructed by such Secured Party(ies)), provided that
any successor to the Lessor under this Lease
(i) expressly assumes the Lessor's obligations hereunder
for the benefit of the Lessee; and
(ii) succeeds to substantially all of the right, title,
and interest in and to all assets of the Lessor reasonably
necessary for such successor to perform its obligations under
this Lease.
Upon any subsequent succession and assumption of this Lease by a party other
than a Secured Party, such Secured Party shall be released from any further
obligations and liabilities under this Lease.
8.1.1(c) The Secured Parties of the Lessor shall be entitled to
exercise all rights and to cure any defaults of the Lessor under this Lease,
within such cure period as may be available to the Lessor under this Lease. Upon
receipt of notice from any Secured Parties, the Lessee agrees to accept such
exercise and cure by such Secured Parties and to render all or any part of the
performance due to the Lessor by the Lessee under this Lease to such Secured
Parties.
8.1.1(d) Each Secured Party of the Lessor shall be deemed an
express third-party beneficiary of this Section. This Section shall be
self-operative, and no further instrument of subordination shall be required by
any security agreement or other document reflecting any Security Interests to
make this subordination effective. In confirmation of such acknowledged
subordination, the Lessee shall execute promptly any instrument or certificate
which the Lessor or its Secured Parties may reasonably request.
8.2 Lessor's Right To Assign. The Lessee agrees that the Lessor may
-------------------------
assign its rights and interests under this Lease, in the Satellite and/or in any
or all sums due or to become due to the Lessor under this Lease to any party at
any time and 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 hereunder of the
Lessor.
The Lessee agrees that upon receipt of notice of such assignment, the Lessee
shall perform all of its obligations directly for the benefit of the assignee
and shall pay all sums due or to become due to the Lessor directly to the
assignee, or as otherwise directed by such assignee. Upon receipt of notice of
such assignment, the Lessee agrees to execute and deliver such documentation as
assignee may reasonably require from the Lessee to give effect to the intent of
this Section. Upon any such assignment by the Lessor, the Lessor shall be
released from any further obligations and liabilities under this Lease.
8.3 Lessee Assignment. The Lessee shall not Assign the Lessee's
------------------
interest in the Satellite or the Lease without the prior written consent of the
Lessor. Such consent may be granted or withheld in the sole and absolute
discretion of the Lessor if the assignment is a person other than an affiliate
of the Lessee, but shall not be unreasonably withheld if such assignment is to
an affiliate of Lessee. Notwithstanding the foregoing, the Lessee may assign its
rights and interests under this Lease to a wholly-owned subsidiary of the
Lessee, provided that such assignee assumes all of the duties and obligations
hereunder of the Lessee and executes such other instruments as the Lessor may
reasonably request, including, without limitation, instruments making
representations and warranties made by the Lessee in this Lease, all such
assumption and other instruments and documents to be by written instrument in
form and substance satisfactory to the Lessor, and the Lessee executes the
Guarantee and other instruments contemplated by Section 9 of this Lease. If the
Lessor is unable to regain the use of all or any part of the Satellite free and
clear of any claims or liens arising by or through the Lessee (including,
without limitation, the Lessee's subcontractors, customers, creditors or
vendors), then, in addition to any other remedies the Lessor may have, the
Lessee shall indemnify and hold harmless the Lessor from any such claims or
liens and, at the Lessor's option,
(i) the Lessor may elect not to regain use of the
Satellite and the Lessee shall be obligated, without regard to any
such termination or expiration of this Lease, to pay the Lessor the
Lease payments due to it at the rate specified herein for the
period of time that the Satellite remains so encumbered; or
(ii) the Lessor may elect to regain such use of the
Satellite as it can, and the Lessee shall make such payments to the
Lessor as shall be necessary to make the Lessor whole for such lost
use of the Satellite.
9. Guarantee of Lessee's Obligations
---------------------------------
Upon any permitted assignment of this Lease by the Lessee to a wholly-owned
subsidiary of the Lessee pursuant to Section 8.3, the Lessee shall become a
guarantor of its successor Lessee's obligations under this Lease and shall
simultaneously with such assignment execute a Guarantee in the form attached to
this Lease as Exhibit C, and shall execute such other documents as may be
----------
reasonably requested by the Lessor.
10. Representations and Warranties of AMSC and AMSC Parent
------------------------------------------------------
10.1 AMSC. AMSC hereby represents and warrants to the Lessee:
----
10.1.1(a) that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power, right and authority to execute and to deliver this Lease and to
enter into and to consummate the transactions contemplated hereby;
10.1.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of AMSC;
10.1.1(c) that this Lease is a valid and binding obligation of
AMSC, enforceable against AMSC in accordance with its terms;
10.1.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 10.1, the execution, delivery and performance of this Lease
-------------
and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other material
instrument to which AMSC is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which AMSC is subject; and
10.1.1(e) AMSC holds title to and is the sole owner of the
Satellite.
10.2 AMSC Parent. AMSC Parent hereby represents and warrants to the
-----------
Lessee:
10.2.1(a) that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
full corporate power, right and authority to execute and to deliver this Lease
and to enter into and to consummate the transactions contemplated hereby;
10.2.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of AMSC
Parent;
10.2.1(c) that this Lease is a valid and binding obligation of
AMSC Parent, enforceable against AMSC Parent in accordance with its terms; and
10.2.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 10.2, the execution, delivery and performance of this Lease
-------------
and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other material
instrument to which AMSC Parent is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which AMSC Parent is subject.
11. No Warranties and Representations
Relating to the Satellite
---------------------------------
11.1 No Warranties. THE LESSEE HEREBY ACKNOWLEDGES THAT THE SATELLITE
-------------
WAS CONSTRUCTED, MANUFACTURED AND LAUNCHED BY PERSONS OTHER THAN AMSC, THAT THE
LESSEE WILL BE PROVIDED WITH THE RESULTS OF CERTAIN PERFORMANCE TESTS, AND THAT
THE LESSEE HAS BEEN GRANTED CERTAIN RIGHTS OF TERMINATION HEREIN IN THE EVENT
THAT THE SATELLITE DOES NOT MEET THE SPECIFIED SATELLITE PERFORMANCE.
ACCORDINGLY, THE LESSEE HEREBY ACKNOWLEDGES THAT THE WARRANTIES AND
REPRESENTATIONS OF AMSC CONTAINED IN SECTION 10 CONSTITUTE THE SOLE WARRANTIES
AND REPRESENTATIONS OF THE LESSOR. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, ANY AND ALL EXPRESS AND IMPLIED WARRANTIES WITH RESPECT TO THE
SATELLITE, INCLUDING, BUT NOT LIMITED TO, WARRANTIES AS TO SATELLITE
PERFORMANCE, DESIRABILITY, RELIABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PURPOSE OR USE OR WARRANTIES AGAINST INTERFERENCE OR INFRINGEMENT, ARE EXPRESSLY
EXCLUDED AND DISCLAIMED BY THE LESSOR.
12. Representations and Warranties of Lessee
----------------------------------------
12.1 Lessee. The Lessee hereby represents and warrants to the Lessor:
------
12.1.1(a) that the Lessee is a corporation duly organized, validly
existing and in good standing under the laws of Gibraltar, with full corporate
power, right and authority to execute and to deliver this Lease and to enter
into and to consummate the transactions contemplated hereby;
12.1.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of the
Lessee;
12.1.1(c) that this Lease is a valid and binding obligation of the
Lessee, enforceable against the Lessee in accordance with its terms; and
12.1.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 12.1(d), the execution, delivery and performance of this
-----------------
Lease and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other
instrument to which the Lessee is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which the Lessee is subject.
12.1.1(e) the Founders and their ownership interests are set forth
on Schedule 12.1(e).
13. General Provisions
13.1 Binding Effect. All the terms and provisions of this Lease shall
---------------
be binding upon and shall inure to the benefit of (i) the Lessor and its
successors and permitted assigns; (ii) AMSC Parent and its successors and
permitted assigns; (iii) the Lessee and its successors and permitted assigns;
and (iv) any Guarantor and its successors and permitted assigns.
13.2 Third-Party Rights; Relationship of Parties. Except as expressly
--------------------------------------------
provided in this Lease, nothing contained in this Lease shall be deemed or
construed by the parties or by any third party to create any rights, obligations
or interests of third parties. Nothing in this Lease is intended to or shall be
construed to create the relationship of principal and agent, partnership or
joint venture, or any other fiduciary relationship or association between any of
the parties.
13.3 Notices. All notices, requests and other communications to any
-------
party shall be in writing (including telecopy or similar writing) and shall be
given as follows:
If to the Lessor, to:
AMSC Subsidiary Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and
American Mobile Satellite Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
AMSC Subsidiary Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and
American Mobile Satellite Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If related to payments, with a copy to
the attention of: Accounting Department
If to the Lessee, to:
African Continental Telecommunications Ltd.
▇▇/▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
Attention: C. ▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Attention: ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address or telecopier number as such party may hereafter
specify for the giving of notice. All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. in the place of receipt and such day is a
business day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
13.4 Waiver of Breach/Remedies. No failure on the part of any party to
-------------------------
notify any other parties of any noncompliance hereunder, and no failure on the
part of any party to exercise its rights hereunder shall prejudice any remedy
for any subsequent noncompliance, and any waiver by any party or any breach or
noncompliance with any term or condition of this Lease shall be limited to the
particular party and the particular instance and shall not operate or be deemed
to waive any future breaches or noncompliance with any term or condition. Except
as provided herein, all remedies and rights hereunder and those available in law
or in equity shall be cumulative and the exercise by any party of any such right
or remedy shall not preclude the exercise of (a) any other right or remedy
available to it under this Lease or in law or in equity or (b) the exercise by
any other party of any right or remedy available to it under this Lease or in
law or in equity.
13.5 Applicable Law. This Lease shall be construed and enforced in
---------------
accordance with the internal laws of the State of Delaware, United States of
America, without regard to the conflict or choice of laws provisions thereof. On
or prior to the Relocation Commencement Date, the parties will enter into a
choice of law agreement substantially in the form of Exhibit D hereto.
13.6 Dispute Resolution
------------------
13.6.1(a) All controversies or claims arising out of or relating
to this Lease, or breach thereof (a "Dispute"), between the Lessor and/or AMSC
Parent on the one hand and the Lessee and/or a Guarantor on the other hand shall
be resolved in accordance with the procedures set forth in this Section 13.6.
13.6.1(b) Initially, the Dispute shall be referred by written
notice to the Lessee employee designated by the Lessee and the Lessor employee
designated by the Lessor to initially review Disputes. Disputes related to the
health or safety of the Satellite shall be submitted by written notice to the
Technical Operations Committee.
13.6.1(c) If within fifteen (15) days after written notice of the
Dispute is given to them, the employees to whom the Dispute has been referred,
or the Technical Operations Committee in the event of Disputes involving the
health or safety of the Satellite, do not resolve the Dispute, then the Dispute
shall be referred by the party asserting such Dispute by written notice
delivered to the Chief Executive Officer of each of the Lessor and the Lessee,
who shall attempt, in good faith, to resolve the Dispute within fifteen (15)
days after written notice of such Dispute is given to them. Such written notice
shall contain a statement setting forth the nature of the Dispute. At the
request of either the Lessor or the Lessee, the Chief Executive Officers shall
meet at the same location to discuss such Dispute in good faith. If the Chief
Executive Officers are unable to reach agreement to resolve the Dispute within
the fifteen (15) day period after written notice of such Dispute is given to
them, the Dispute may be submitted by either party to arbitration administered
by the American Arbitration Association ("AAA") in accordance with the
provisions governing expedited arbitration contained in the Commercial
Arbitration Rules of the AAA. The place of arbitration shall be Wilmington,
Delaware. Any arbitral award shall be in writing and shall be final and binding
on the parties to such arbitration proceeding. The award may include an award of
costs, including reasonable attorneys' fees and disbursements, but may not
include an award of punitive damages. Judgment upon the award may be entered by
any court having jurisdiction thereof or having jurisdiction over the parties to
such arbitration proceeding or their assets.
13.7 Counterparts and Formal Date. This Lease may be executed in one or
----------------------------
more counterparts, each of which when so executed shall be deemed to be an
original and such counterparts together shall constitute one and the same
instrument and notwithstanding the date(s) of execution by any of the parties
shall be deemed to bear the date written at the beginning of this Lease.
13.8 Captions. The captions and headings herein are inserted for
--------
convenience and reference only and in no way define or limit the scope or
content of this Lease or in any way affect its provisions.
13.9 Entire Understanding. This Lease, including all exhibits and
---------------------
schedules, represents the entire understanding and agreement among the parties
with respect to the subject matter hereof, and supersedes all prior negotiations
and agreements between or among the parties concerning that subject matter. This
Lease may be amended, supplemented or changed only by an agreement in writing
which makes specific reference to this Lease and which is signed by the Lessor
and the Lessee and, with respect to Sections 9 and 13.12, additionally by the
Guarantor and AMSC Parent, respectively.
13.10 Dollar Amounts. All references herein to dollar amounts are
--------------
expressed in U.S. dollars.
13.11 Lessee's Payment Obligations. The Lessee's Lease payment
-------------------------------
obligations are absolute and are not subject to abatement, reduction or setoff
by reason of any obligations of the Lessor to the Lessee under this Lease or
otherwise, except that the Lessee's Lease payment obligations shall be set off
(i) to the extent of the cost of such insurance, if the Lessor breaches its
obligation to secure in-orbit insurance pursuant to Section 2.2 and the Lessee
procures such insurance, (ii) to the extent the Lessor is liable for and does
not satisfy a monetary judgment owed to the Lessee under this Lease or the
Service Contract or the License Agreement pursuant to a final and binding order
pursuant to Section 13.6 of this Lease, and (iii) by Seven Million Five Hundred
Thousand Dollars ($7,500,000), such offset to be effected by having the annual
Lease payment for the last year of the Lease Term (i.e., the Initial Term if the
Lease Term is not renewed or the Renewal Term if the Lease Term is renewed) be
Thirty Million Five Hundred Thousand Dollars ($30,500,000), with the last
quarterly payment to be Two Million Dollars ($2,000,000), rather than Nine
Million Five Hundred Thousand Dollars ($9,500,000).
13.12 Guarantee of Lessor's Obligations. AMSC Parent hereby guarantees
---------------------------------
absolutely, irrevocably and unconditionally to the Lessee the complete and
prompt observance, fulfillment and performance of each and every provision and
obligation of the Lessor under this Lease or under the Service Contract or
License Agreement, and hereby covenants and agrees that it shall pay the amount
of any damages or other loss suffered by the Lessee as a result of the breach of
any covenant or provision of this Lease, the Service Contract or License
Agreement by the Lessor or as a result of any misrepresentation of any fact in
any representation and warranty in this Lease, the Service Contract or License
Agreement or in any certified statement provided pursuant to this Lease, the
Service Contract or License Agreement, without the necessity of the Lessee first
presenting a claim to, or bringing an action or suit against, the Lessor or
otherwise bringing any action or suit for recovery of such damages; provided
that AMSC Parent shall be liable hereunder only to the extent of the liability
of the Lessor under this Lease, the Service Contract or License Agreement and
shall be entitled to assert all defenses that could be asserted by the Lessor.
The guarantees set forth in this Section 13.12 shall become effective upon
execution of this Lease by AMSC Parent and shall remain in effect in favor of
the Lessee until the later of the performance in full of all of the obligations
of the Lessor hereunder and under the Service Contract and License Agreement or
the release in writing by the Lessee. The obligations of AMSC Parent under this
Section shall be absolute and unconditional, irrespective of any amendment,
modification or change of any other Section of this Lease or any waiver of
compliance with any obligation hereunder. No assignment or transfer by AMSC
Parent and no termination, amendment, waiver or modification of this guarantee
or any of its terms or provisions shall be effective against the Lessee unless
it is set forth in a written instrument signed by AMSC Parent and the Lessee.
13.13 Technical Operations Committee. The Lessor and the Lessee shall
-------------------------------
establish a technical operations committee (the "Technical Operations
Committee") consisting of one representative from each of the Lessor and the
Lessee (and an alternate member from each). The Lessor and the Lessee may submit
to the Technical Operations Committee for clarification or confirmation matters
related to the operation of the provisions of this Lease concerning safe
operation or the health and safety of the Satellite. The Technical Operations
Committee shall also be the first step in the dispute resolution process with
respect to matters involving the health or safety of the Satellite as provided
in Section 13.6. If the members of the Technical Operations Committee shall
agree on a particular interpretation of a provision of this Lease related to
matters within the Committee's mandate, then actions pursuant to such
agreed-upon interpretation shall presumptively be deemed to be in compliance
with this Lease.
13.14 Lease Characterization. The parties agree that the lease of the
-----------------------
Satellite by the Lessor to the Lessee shall be characterized for purposes of all
applicable law as an operating lease. Notwithstanding any provisions expressed
in or implied by this Lease, property in and title to the Satellite shall at no
time pass to the Lessee and the Satellite shall at all times remain the property
of the Lessor. The Lessee shall take all actions and execute all documents as
may reasonably be requested by the Lessor to implement the intention of this
Section 13.14.
~~ end of page ~~
[signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
AMSC SUBSIDIARY CORPORATION
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer and President
AMERICAN MOBILE SATELLITE CORPORATION
(as Guarantor)
By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer and President
AFRICAN CONTINENTAL TELECOMMUNICATIONS LTD.
By /s/▇.▇. ▇▇▇▇▇▇▇
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Vice Chairman
Exhibit A
CERTAIN DEFINED TERMS
13.1 $ shall mean United States dollars.
13.2 African Performance Tests are tests and analyses conducted at the
---------------------------
Relocated Orbital Position to verify that the Satellite operates as specified
and can perform acceptably. The African Performance Tests are set forth on
Schedule 2.1.
------------
13.3 Applicable Legal Requirements means satisfying requirements of all
------------------------------
laws, statutes, ordinances, rules and regulations affecting or in any way
relating to the relevant subject matter, including, without limitation, those of
governmental entities and international organizations (including the ITU) having
jurisdiction and including, without limitation, obtaining and maintaining any
applicable licenses and approvals.
13.4 Assign means to grant, transfer, sell, assign, charge, mortgage,
------
encumber or otherwise convey directly or indirectly, in whole or in part.
13.5 Bankruptcy Event with respect to a person means (i) the voluntary
----------------
commencement of any proceeding, or voluntary filing, by such person of a
petition seeking liquidation, reorganization, arrangement or readjustment, in
any form, of such person's debts under any jurisdiction's insolvency,
liquidation or similar laws (each such jurisdiction's laws being referred to as
a Bankruptcy Law), or such person's filing of an answer consenting to or
acquiescing in any such petition, or (ii) the making by such person of any
general assignment for the benefit of such person's creditors or the admission
by such person in writing of such person's inability to pay such person's debts
as they mature, or (iii) the consent by such person to the filing of, the
failure by such person to contravene successfully with respect to, or the
granting of an order of relief with respect to (A) any involuntary petition or
application under any Bankruptcy Law seeking an application for the appointment
of a receiver, trustee, custodian, sequestrator or similar official for the
assets of such person, or (B) any involuntary petition or application under any
Bankruptcy Law seeking liquidation, reorganization, arrangement or readjustment
of such person's debts under any Bankruptcy Law, or (iv) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the assets of
such person under any Bankruptcy Law or otherwise.
13.6 CMIS Expenses are those expenses to be paid by the Lessor under the
-------------
License Agreement and Service Contract.
13.7 CMIS Sublicense Agreement means that "Sublicense Agreement for TMI
-------------------------
Technology" of even date herewith between the Lessor and the Lessee relating to
the sublicense of certain intellectual property of TMI, or intellectual property
on license to TMI, relating to a certain customer management information system.
13.8 Commercial Service Date means the date when the Lessee begins
-------------------------
providing or is technically capable of providing commercial service using the
Satellite and its ground-based communication facilities.
13.9 Constructive Total Loss means a Constructive Total Loss as defined
-----------------------
in the in-orbit policy referred to in Section 2.2 or if no such policy shall be
in place, then a Constructive Total Loss as defined in AMSC's in-orbit insurance
policy for the Satellite as of the date of this Lease.
13.10 End of Life or EOL shall mean the earlier of March 31, 2005; the
----------- ---
date on which, in Lessor's reasonable judgment, less than 42 Kg of fuel remains
(including any uncertainty in the estimate of fuel); and the first date on which
the Satellite is unable to transmit or receive on Beams 1, 2 or 3 (Central,
Mountain or West) despite the use of all available backup capacity.
13.11 FCC means the Federal Communications Commission.
---
13.12 Ground Segment Contracts shall mean the CMIS Sublicense
---------------------------
Agreement, the License Agreement, the Service Contract and any other agreements
entered into in connection with the foregoing.
13.13 Guarantor means the guarantor of the Lessee's obligations
---------
pursuant to Section 9 of the Lease. The Lessor may designate another parent or
subsidiary of the Lessee or of the Guarantor as an additional Guarantor if, in
the opinion of the Lessor, the additional financial assurances of that person
would reasonably be required.
13.14 Initial AMSC Payment Expenses means an amount up to Five Million
------------------------------
Dollars ($5,000,000) which is expended by AMSC on the Lease and expenses under
the Ground Segment Contracts. The Initial AMSC Payment Expenses shall be paid by
the Lessee to AMSC on the Start Date.
13.15 Initial Payment means the Ten Million Dollar ($10,000,000)
----------------
payment to AMSC, Seven Million Five Hundred Thousand Dollars ($7,500,000) of
which shall be paid upon the Satellite Contract Date and Two Million Five
Hundred Thousand Dollars ($2,500,000) of which shall be paid, and which the
Lessee agrees to pay, no later than the date forty-five (45) days after the
Satellite Contract Date. Up to Five Million Dollars ($5,000,000) of the Initial
Payment is to be used to fund those expenses to be incurred under the Lease and
Ground Segment Contracts as directed by the Lessee, including satellite
inversion software, other project development and management expenses, TT&C
Services, or otherwise.
13.16 ITU means the International Telecommunication Union.
---
13.17 Lessee's Agents includes all agents, directors, employees,
----------------
officers, partners, owners, contractors, licensees or invitees of the Lessee.
13.18 License Agreement means that intellectual property License
------------------
Agreement of even date herewith between the Lessor and the Lessee relating to
the license of certain intellectual property of the Lessor and the Lessee, or
intellectual property on license to the Lessor, relating to ground-based
communication facilities.
13.19 Minimum Performance Specifications shall have the meaning set
------------------------------------
forth in the Test Plan.
13.20 North American Performance Tests are tests and analyses conducted
--------------------------------
to verify that the Satellite operates as specified and can perform acceptably
when moved to the Relocated Orbital Position. The North American Performance
Tests are set forth on Schedule 2.1. Performance Tests shall be carried out at
------------
mutually agreed locations in North America corresponding to the locations of
Johannesburg and selected other points in Africa once the Satellite is moved.
The test results shall provide the performance baseline to use in evaluating
satellite performance after relocation.
13.21 Offering means the public floatation of equity of the Lessee or
--------
its permitted assignee on the Johannesburg stock exchange or any similar
offering or offerings of equity with gross proceeds to the issuer of at least
One Hundred Twenty Million Dollars ($120,000,000).
13.22 On Station Acceptance means the Satellite has been moved to the
----------------------
Relocated Orbital Position and the African Performance Tests have been completed
with results meeting the Minimum Performance Specifications at such location.
13.23 On Station Acceptance Date means the date on which On Station
-----------------------------
Acceptance occurs.
13.24 Partial Loss means a loss in Satellite performance that is not a
------------
Total Loss or a Constructive Total Loss.
13.25 Post-Offering Payment means a payment of Twenty-Eight Million
----------------------
Dollars ($28,000,000) by the Lessee to the Lessor minus any Space Segment
Expenses with respect to which the Lessee had previously reimbursed the Lessor.
13.26 Relocated Orbital Position means the geostationary orbital
----------------------------
position located at 11.5(degree) East Longitude or such other nearby orbital
position as may be required for satellite frequency coordination.
13.27 Relocation Commencement Date means the date on which the Lessor
------------------------------
begins relocation of the Satellite to the Relocated Orbital Position.
13.28 Returned Orbital Position means the geostationary orbit position
-------------------------
located at 101(degree) West Longitude or such other orbital position as the
Lessor shall designate which will not be a U.K.-sponsored orbital position
unless separately negotiated.
13.29 Satellite means the MSAT-2 (M-2) satellite also known as AMSC-1,
---------
acquired pursuant to the American Mobile Satellite Corporation Contract with
▇▇▇▇▇▇ Aircraft Company for an MSAT Spacecraft, Contract No. AMSC-S/C-11/90/001,
dated November 29, 1990.
13.30 Satellite Contract Date means the date of the signing of this Lease.
-----------------------
13.31 Satellite Relocation Date means such date, on or after the Start
--------------------------
Date, when the following conditions have been satisfied or waived in writing by
the Lessor:
(i) Performance Tests are complete and the Lessee has not
terminated this Lease under Section 5.1(a)(ii);
(ii) receipt of all necessary government approvals (including
American, Canadian, English, South African, or otherwise)
to move the Satellite to the Relocated Orbital Position;
(iii) the Lessee has obtained final approval under all Applicable
Legal Requirements for the Satellite to occupy the Relocated
Orbital Position, including coordination of frequencies for
TT&C and initial operation;
(iv) the Lessor has approved, in its reasonable discretion,
the contracts for the construction of the TT&C facilities;
(v) the Lessor shall have determined, in its reasonable
discretion, that the TT&C facilities have been
completed sufficiently to safely permit relocation of
the Satellite to begin;
(vi) the Lessor shall have determined, in its reasonable
discretion, that the ground segment facilities have
been or will be completed sufficiently to safely permit
testing of the Satellite at the Relocated Orbital
Position;
(vii) the Offering has occurred;
(viii) the Lessee has paid the Post-Offering Payment to the Lessor;
and
(ix) there is no Event of Default.
13.32 Service Contract means the services agreement between the Lessee
----------------
and the Lessor of even date herewith.
13.33 Space Segment Expenses means the expenses the Lessor incurred for
----------------------
Satellite inversion, TT&C drift expenses, insurance for the Lessee's benefit and
Satellite testing expenses.
13.34 Start Date means the date on which the Lessee makes the
-----------
Post-Offering Payment, which shall not be more than ten (10) days after the date
of the Offering.
13.35 Test Plan means the test plan set forth on Schedule 2.1, which
--------- -------------
sets forth the North American Performance Tests and the African Performance
Tests.
13.36 TMI Satellite means the MSAT-1 (M-1) satellite owned by TMI.
-------------
13.37 Total Loss means a Total Loss as defined in the in-orbit
-----------
insurance policy referred to in Section 2.2 or if no such policy shall be in
place, then Total Loss as defined in AMSC's in-orbit insurance policy for the
Satellite in place as of the date of this Lease.
13.38 TT&C means telemetry, tracking and control.
----
13.39 TT&C Services means telemetry, tracking and control services,
-------------
drift orbit operations and other operational services in connection with the
Satellite.
Exhibit B
FORM OF
Certificate of Lessee [and Guarantor]
This Certificate is given pursuant to Section 6(a)(vi) of the
Satellite Lease Agreement for the AMSC-1 Satellite.
In reliance on the Certificates of AMSC Subsidiary Corporation
("AMSC") and American Mobile Satellite Corporation ("AMSC Parent"), dated as of
the same date as this Certificate, copies of which are attached hereto, the
undersigned Lessee [and Guarantor] under such Satellite Lease Agreement hereby
certify to AMSC and AMSC Parent as follows:
1. The Satellite Lease Agreement is and remains a valid,
binding agreement among the parties thereto.
2. The Satellite Lease Agreement has not been terminated
and remains in full force and effect.
3. The Lessee [and the Guarantor] have made to the Lessor
all payments due to the Lessor as of the date hereof pursuant to
the Satellite Lease Agreement.
4. As of this date, the Lessee has no ability to terminate
the Satellite Lease Agreement pursuant to the terms thereof.
~~ end of page ~~
[signatures appear on following page]
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of the day of , 199 .
------ ---------------- -
[LESSEE]
By
Name:
Title:
[[GUARANTOR]
By
Name:
Title:]
FORM OF
Certificate of Lessor and AMSC Parent
In reliance on the Certificate of ("Lessee")
---------------------
[and ("Guarantor")], dated as of the same date as this
---------------------
Certificate, a copy of which are attached hereto, the undersigned AMSC
Subsidiary Corporation and American Mobile Satellite Corporation under such
Satellite Lease Agreement hereby certify to Lessee [and Guarantor] as follows:
1. The Satellite Lease Agreement is and remains a valid,
binding agreement among the parties thereto.
2. The Satellite Lease Agreement has not been terminated
and remains in full force and effect.
3. The Lessee [and the Guarantor] have made to the Lessor
all payments due to the Lessor as of the date hereof pursuant to the Satellite
Lease Agreement.
4. As of this date, the Lessee has no ability to terminate
the Satellite Lease Agreement pursuant to the terms thereof.
~~ end of page ~~
[signatures appear on following page]
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of the day of , 199 .
------ --------------- -
AMSC SUBSIDIARY CORPORATION
By
Name:
Title:
AMERICAN MOBILE SATELLITE CORPORATION
By
Name:
Title:
Exhibit C
FORM OF GUARANTEE
Reference is made to the SATELLITE LEASE AGREEMENT (the "Lease") made
as of the 2nd day of December, 1997, by and among AMSC Subsidiary
Corporation, a Delaware corporation, American Mobile Satellite Corporation,
a Delaware corporation, and African Continental Telecommunications Ltd., a
Gibraltar company. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Lease.
The Guarantor hereby guarantees absolutely, irrevocably and
unconditionally to the Lessor the complete and prompt observance,
fulfillment and performance of each and every provision and obligation of
the Lessee under the Lease or under the Service Contract or License
Agreement, and hereby covenants and agrees that it shall pay the amount of
any damages or other loss suffered by the Lessor as a result of the breach
of any covenant or provision of the Lease, the Service Contract or License
Agreement by the Lessee or as a result of any misrepresentation of any fact
in any representation and warranty in the Lease, the Service Contract or
License Agreement or in any certified statement provided pursuant to the
Lease, the Service Contract or License Agreement, without the necessity of
the Lessor first presenting a claim to, or bringing an action or suit
against, the Lessee or otherwise bringing any action or suit for recovery
of such damages; provided that the Guarantor shall be liable hereunder only
to the extent of the liability of the Lessee under the Lease, the Service
Contract or License Agreement and shall be entitled to assert all defenses
that could be asserted by the Lessee.
The guarantees set forth in this Guarantee shall become effective upon
execution by the Guarantor of this Guarantee and shall remain in effect in
favor of the Lessor until the later of the performance in full of all of
the obligations of the Lessee under the Lease and under the Service
Contract and License Agreement or the release in writing by the Lessor. The
obligations of the Guarantor under this Guarantee shall be absolute and
unconditional, irrespective of any amendment, modification or change of any
other Section of the Lease, the Service Contract or the License Agreement
or any waiver of compliance with any obligation hereunder. No assignment or
transfer by the Guarantor and no termination, amendment, waiver or
modification of this guarantee or any of its terms or provisions shall be
effective against the Lessor unless it is set forth in a written instrument
signed by the Guarantor and the Lessor.
Representations and Warranties. The Guarantor hereby represents and
warrants to the Lessor:
13.39.1(a) that the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of , with full
----------------
corporate power, right and authority to execute and to deliver this Lease
and to enter into and to perform the obligations of the Guarantor
hereunder;
13.39.1(b) that the execution and delivery of this Lease by the officer
so doing, and the performance of the obligations of the Guarantor
hereunder, have been duly authorized by all necessary corporate action on
the part of the Guarantor;
13.39.1(c) that this Lease is a valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms;
that the execution, delivery and performance of the Guarantee and the
performance of the obligations of the Guarantor hereunder shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other
instrument to which the Guarantee is subject or is a party; or (ii) any
law, rule, regulation, ordinance, judgment, decree, order, governmental
permit or license to which the Guarantor is subject.
~~ end of page ~~
[signatures appear on following page]
IN WITNESS WHEREOF, the undersigned has executed this Guarantee as
of the day of , 199 .
------ ---------------- -
[[GUARANTOR]
By
Name:
Title:]
EXHIBIT D
CHOICE OF LAW AGREEMENT
This CHOICE OF LAW AGREEMENT (this "Agreement") is made as of
December 2, 1997, by and among AMSC Subsidiary Corporation, a corporation
incorporated under the laws of the State of Delaware, American Mobile
Satellite Corporation, a Delaware corporation, and African Continental
Telecommunications Ltd., a Gibraltar company.
WITNESSETH:
WHEREAS, the parties entered into a Satellite Lease Agreement
dated as of December 2, 1997 (the "Satellite Lease Agreement");
WHEREAS, pursuant to the Satellite Lease Agreement, the parties
thereto have agreed that the Satellite Lease Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware and that all
proceedings with respect to the Satellite Lease Agreement shall be brought
only in Delaware; and
WHEREAS, the parties wish to confirm that their choice of Delaware
law shall be enforceable in accordance with 6 Del. C. Section 2708.
--- --
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Single Undertaking. This Agreement and the Satellite Lease
------------------
Agreement and the other documents referred to or provided for therein and the
transactions contemplated thereby shall be read and construed as a single
undertaking among the parties.
2. Consent to Jurisdiction. The parties irrevocably consent to the
-----------------------
exclusive jurisdiction of arbitration in the State of Delaware for all purposes
in connection with any action or proceeding that arises out of or relates to the
Satellite Lease Agreement (collectively, "Proceedings"). The parties hereby
agree that service of summons, complaint, or other process in connection with
any Proceedings may be made as set forth in the Satellite Lease Agreement
with respect to service of notices, and that service so made shall be as
effective as if personally made in the State of Delaware.
3. Acknowledgments. As set forth in the Satellite Lease Agreement
---------------
and in Section 2 above, it is the intent of each of the parties hereto that all
Proceedings be heard exclusively through arbitration in the State of Delaware.
Each of the parties hereto acknowledges that (i) it has freely agreed that all
Proceedings will be heard in accordance with Section 2 above, (ii) the
agreement to choose arbitration in the State of Delaware to hear all Proceedings
in accordance with Section 2 above is reasonable and will not place such party
at a disadvantage or otherwise deny it its day in court, (iii) it is a
knowledgeable, informed, sophisticated business entity capable of understanding
and evaluating the provisions set forth in this Agreement, including Section 2,
and (iv) it has been represented by such counsel and other advisors of its
choosing as it has deemed appropriate in connection with its decision to
enter into this Agreement, including Section 2.
4. Appointment of Agent. For purpose of further effecting the
---------------------
parties' agreements set forth in the Satellite Lease Agreement and Section 2
above, (i) the parties hereby irrevocably appoint Corporation Service Company,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as its agent for acceptance of
legal process in the State of Delaware in connection with any Proceeding, and
each party agrees that service upon its agent shall have the same legal force
and effect as if served upon it personally within the State of Delaware.
5. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the internal laws of the State of
Delaware.
~~ end of page ~~
[signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
AMSC SUBSIDIARY CORPORATION
By
Name:
Title:
AMERICAN MOBILE SATELLITE CORPORATION
By
Name:
Title:
AFRICAN CONTINENTAL TELECOMMUNICATIONS LTD.
By
Name:
Title:
Schedule 1.3
WIRE TRANSFER INSTRUCTIONS
OF LESSOR
Bank Name: Wachovia Bank of North Carolina
Address: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇
ABA No.: 053 100 494
Account Name: AMSC Subsidiary Corporation
Account Number: 8738-071423
Reference: Include invoice number, if applicable
AMSC Contact: ▇▇▇▇ ▇▇▇▇▇▇▇
Manager, Treasury Operations
▇▇▇-▇▇▇-▇▇▇▇
Schedule 1.3 Page 1
SCHEDULE 2.1
SATELLITE RELOCATION AND ACCEPTANCE PLAN
SUMMARY
The following are the major steps in the relocation of the Satellite.
Remove traffic from the Satellite. If practicable, Telesat will assume control
from Panamsat at this time.
Adjust ESA and RPMs to the configuration to be used at the Relocated Orbital
Position.
Conduct the North American Performance Test (a.) t o verify that the Satellite
Operates as described and can perform acceptably when moved to the
Relocated Orbital Location, and (b.) to obtain a set of baseline data.
These test are summarized below.
If required, reorient the Satellite to its nominal configuration and restore
traffic to the Satellite until the Satellite Relocation Date, then
permanently remove traffic from the Satellite.
Drift the Satellite from 101 degrees West to the Relocated Orbital Position.
Transfer orbit facilities in Chilworth England will be upgraded to receive
the Satellite and initially operate it until TT&C facilities at Gibraltar
and Johannesburg are completed.
Invert and reorient the Satellite and re-adjust RPMs and ESA if required.
Conduct the African Performance Test, which are a subset of the North American
Performance Tests to be repeated at Johannesburg and a few other African
points once the Satellite has reached the Relocated Orbital Position to
validate that coverage is correct and relocation of the Satellite has not
degraded performance.
Schedule 2.1 Page 1
AMSC-1 TEST PLAN DESCRIPTION
The following summarizes the test planned for both the North American and the
African Performance Test.
Test Plan Objective
The proposed plan is to test the satellite in North America at or near its
current location at 101oW. to both verify performance and to obtain a set of
baseline data. These tests would then be repeated in Africa once the satellite
has reached the Relocated Orbital Position and is pointed correctly. The
accompanying diagrams assume this position is 18o East; slight adjustments to
the test points may be needed to accommodate a different orbital location.
The purpose of the test would be as follows:
To verify the L-Band satellite EIRP performance for each of the four beams.
Using the measured EIRP data to verify that the satellite antenna pointing is
correct.
To verify the L-Band satellite receive performance for each of the four beams.
To verify the Ku-Band satellite receive performance (one location only).
To verify the Ku-Band downlink performance (one location only).
The main element of the testing will be to verify that the satellite expected
coverage is available both in North America and at the new orbital location over
Africa.
Payload Test
The following payload test will be performed as appropriate on the forward,
reverse and Ku-Ku links.
AEIRP and NFD will be measured for all transmit beams,
NPR will be measured at the original orbital loation of 101.0o W for health
verification purposes only,
G/T will be measured for all receive beams; spare receivers will be verified in
pre-designated beams,
All sub-bands will be functionally verified, and
All step attenuators will be functionally verified.
Schedule 2.1 Page 2
Mobile Test System
It is proposed to use the AMSC mobile L-band EIRP test system to confirm
satellite L-Band EIRP and L-Band Receive G/T at three test locations.
In addition, a TMI designed and assembled mobile uplink test system with both
Ku-band and L-band transmit and receive capability will be deployed during the
test phase. The system would include a Ku-Band HPA transmitting via a ground
based high gain Ku-Band antenna sufficient to exercise the satellites Ku-Band to
L-Band Transponder.
Figure 1 shows the configuration of this test system as now proposed.
Test Point Locations
Test points will be selected to enable all four beams to be tested from a
minimum number of test locations (three are proposed). Test Point 3 will be used
for both Beam 1 and Beam 4 testing. It is proposed that the test point be
selected to correspond to the following geographic locations in Africa:
Test Point 1 at Pretoria or alternately Johannesburg (Ku + L-Band transmit
and receive)
▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (L-Band transmit and receive only)
Test Point 3 at Cabinda, Congo (L-Band transmit and receive only) (Beam
1 and Beam 4)
Final selection of test locations will be determined following final selection
of satellite orbital slot and associated satellite pointing.
Note that it is proposed to leave the Ku-Band link test set at one location to
simplify logistics and to ensure a satisfactory and stable uplink signal level.
Uplinking from Pretoria or Johannesburg has the advantage that the Ku- band
signal will be received near the antenna boresight, hence minimizing uplink EIRP
requirements.
At each test location the measurement of two beams will be possible, and this
will assist in verifying both satellite repeater performance as well as
satellite antenna pointing. Data will be collected over a 24 hour period to
account for any thermal variations. All measurements will be made using
calibrated equipment and within the small signal region of the satellite payload
transponders.
Figure 2 shows the proposed test locations in Africa and the corresponding beam
coverage at L-Band.
Figure 3 shows the approximate location of the three test points on the L-band
pattern when the satellite is located at 101oo W. with assumed nominal coverage
of the USA.
Figure 4 shows the coverage when the satellite nominal pointing is changed by
approximately 1.9o to the South to enable measurements to be conveniently
carried out at three locations in North and Central America. Note that this bias
is exactly the amount assumed for ESA shift to optimize coverage of Africa.
Please note that coverage shown for all for the above figures is approximate and
only for illustrative purposes.
Fuel Lifetime Estimate
Lessee and Lessor will mutually agree on a method to estimate the remaining fuel
life of the Satellite at the Relocated Orbital Position.
Schedule 2.1 Page 3
Schedule 2.3
LESSEE'S TT&C FACILITIES
AND SERVICES
Requirements of TT&C Facilities to be provided by Lessee
--------------------------------------------------------
Introduction
------------
Lessee shall provide Tracking Telemetry and Command (TTAC) equipment and
facilities as outlined herein suitable to allow transfer to and ongoing
operations at the Relocated Orbital Position. Lessee agrees to provide three
control facilities each capable of controlling the Satellite via its omni
antenna. One facility will be located within the beam of the communications
antenna pattern in a location such as Johannesburg, South Africa and will be
capable of controlling the Satellite using its directive antenna as well. The
second primary site is to be located in Gibraltar. The third site shall be
located in Chilworth, England and shall be used for transfer orbit maneuvers via
the Satellite's omni antenna. The Chilworth site will also be available for
performing the post-drift testing and systems integration with the
communications ground segment. The Lessee will inform the Lessor three (3)
months prior to the Chilworth station being ready to receive the Satellite to
allow traffic transfer and Pre-Drift IOT to be performed. The Johannesburg site
will be available prior to commencing revenue service. All sites will be linked
to a satellite control facility using redundant International Private Line
64kbps circuits.
Facilities requirements
-----------------------
At each site, facilities suitable for a Satellite Control System will be
provided including but not limited to the following;
Diesel backed UPS power with a rated power capacity of not less
than 50 kVA Environmentally controlled building, with raised
computer floor for the installation of satellite control
equipment. Suitable land area for two antennas, one 8 meters in
diameter, and one 4.5 meters in diameter. Lessee will provide
suitable antenna foundations as per each antenna manufacturer's
recommendations. The antenna foundations will be not more than 25
meters from where the high power amplifiers are installed. All
environmental control of facilities shall meet recommendations as
outlined by the provider of the Satellite Control Equipment.
Access to the site shall be possible for heavy equipment such as
cranes.
Schedule 2.3 Page 1
Lessee will provide suitable communications facilities to allow control of
the satellite from a remote location. Facilities required are;
Standard DTMF tone dial telephone services
Facsimile services ISDN services accessible internationally
The site shall be serviceable by International Private Line
services at data rates of 64 kbps minimum.
Lessee shall provide communications equipment suitable for controlling the
satellite from a remote site as per the requirements of the provider of the
Satellite Control System.
Antennas and RF requirements
-----------------------------
Lessee shall provide two antennas at each site. The prime antenna shall have a
minimum diameter of 8 meters and the back up antenna a diameter of 4.5 meters.
The high power amplifiers (HPAs) shall be 2.5 kilowatt klystrons yielding with
the antenna an minimum EIRP of 88 dBW. An EIRP of 88 dBW will provide effective
commanding through the spacecraft omni antenna, providing an expected command
margin of 15 dB clear sky, assuming a worst case command threshold flux density
of -90 dBW/m2 via the omni.
The 8 meter antenna will have the following characteristics;
Full monopulse tracker using TE21 tracking coupler with Antenna Control
Unit Four port linearly polarized feed +/- 90 degree polarization
adjustment Minimum 120 degree sector azimuth coverage Feed capable of
handling 3kW RF power minimum. G/T of 34 dB/K minimum.
The 34 dB/K antenna performance will provide a minimum telemetry margin of 11.3
dB, with respect to a 1E-6 Bit Error Rate, assuming a 4 kilobit data rate and a
spacecraft EIRP of 7dBW nominal through the omni.
The RF system will be equipped with redundant up and down converters, redundant
LNA's and HPA's.
The high power waveguide combining system will allow routing of the command
signal to either the backup (4.5 meter) or the primary (8 meter) antenna using a
variable power combining system.
The 4.5 meter antenna will allow command and telemetry operations during periods
when the 8 meter antenna is not available due to repair, maintenance and
overhaul. The EIRP is to be 83 dBW minimum and the G/T is 29 dB/K. This will
provide an expected margin of 6 dB for telemetry via the satellite' s omni,
suitable to back up the 8 meter under clear sky conditions. Margins via the
Satellite's communication antenna will be 10 dB's higher nominally.
Schedule 2.3 Page 2
Computers and Baseband equipment
--------------------------------
Lessee shall provide computers with associated software to allow full remote
command, telemetry and range functions to be performed at the station from a
remote Satellite Control facility. The monitor and control equipment provided
shall allow remote control and monitoring of all the satellite control
facility's subsystems. The systems provided shall be fully redundant at each of
the TTAC stations. The software shall be suitably modified and upgraded to
permit full processing of command and telemetry data for the Lessee spacecraft.
Local display consoles shall be installed which will display local spacecraft
telemetry data to support emergency spacecraft operations should control from
the remote Satellite Control Facility not be available. The system will allow an
operator to send manual commands to the spacecraft using the front panel
controls of the command generator. Baseband equipment includes telemetry
receivers, FM modulators, command generators, telemetry processors, computers,
display systems, range tone generator processors, bit synchronizers, PSK
demodulators and associated patch panels.
Schedule 2.3 Page 3
Schedule 3.8
REPORTING SCHEDULE
The following shall be the reporting schedule for the Lessee to the Lessor:
Anomaly Notification shall take place immediately upon the occurrence
---------------------
of any anomaly that threatens or affects the health or safety of the
Satellite or the availability of communications services via verbal
and pager notification to the Lessor upon detection of an anomaly.
Anomaly Reports shall be generated whenever an anomaly is detected by
----------------
either the TT&C Services provider or by the payload monitoring that is
being performed by the Lessee. In the case of any anomaly that
threatens or affects the health or safety of the Satellite or the
availability of communications services, this report shall be a
detailed description along with supporting technical data and shall be
provided no more than two (2) days after anomaly has occurred. All
other anomaly reports shall be summarized and included in the System
Status Report.
Anomaly Investigation Reports shall be generated no more than one
-------------------------------
month from detection of any anomaly that threatens or affects the
health or safety of the Satellite or the availability of
communications services. The Anomaly Investigation Report shall be a
detailed engineering study addressing the cause of the anomaly, impact
to the Satellite and correction actions required, if any, due to the
anomaly.
System Control Log: Lessee shall maintain a log showing date, time and
------------------
person performing each entry. The System Control Log shall show the
completion of all planned events and note any unusual, unplanned
events with the Satellite or ground system. A copy of the log shall be
available for inspection at all times and shall be maintained
throughout the term of the Lease.
Payload Utilization Reports shall be generated on a quarterly basis
-----------------------------
showing on a monthly basis the busy hour utilization of each beam and
the busy hour of each matrix of the Satellite.
Satellite Health Reports shall be generated on a yearly basis suitable
------------------------
for submission to any outside entity Lessee deems appropriate. This
report shall provide a detailed status of each subassembly of the
craft.
Schedule 3.8 Page 1
Satellite Status Reports shall be generated quarterly with a focus on
------------------------
changes that may have occurred from the last Satellite Health Report.
System Status Reports shall be generated quarterly summarizing the
----------------------
status of the Satellite or ground system, with a focus on changes that
may have occurred since the last System Status Report.
Schedule 3.8 Page 2
Schedule 3.12
ESCROW OF SECURITIES
Name Title/Position
---- --------------
C. ▇▇▇▇ ▇▇▇▇▇▇▇ Vice Chairman, African Continental
Telecommunications Ltd.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Executive Officer, African
Continental Telecommunications Ltd.
▇▇▇▇ ▇▇▇▇ Managing Director, African
Continental Telecommunications Ltd.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ President, African Continental
Telecommunications Ltd.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Chief Financial Officer, African
Continental Telecommunications Ltd.
Schedule 3.12 Page 1
Schedule 5.1 and 5.2
GOVERNMENT APPROVALS AND CONSENTS
TO RELOCATE THE SATELLITE AND
CONSUMMATE THE LEASE TRANSACTIONS
United States Government Approvals
Federal Communications Commission
Department of Commerce and
any other applicable agencies with respect to
export control matters or with respect to
the Satellite and the licensed software under the
CGS and the License Agreement
Canadian Government Approvals
Industry Canada
(including under the Bulk Capacity Lease of TMI)
with respect to change in spectrum and orbital slot
for the TMI Satellite
Communications Security Establishment (Canada)
with respect to the TMI Satellite
Schedule 5.1/5.2 Page 1
SCHEDULE 10.1
LESSOR'S CONSENTS
1. Approval of the Federal Communications Commission
2. Export control approval by the Department of Commerce and other government
agencies, as applicable
Schedule 10.1 Page 1
SCHEDULE 10.2
AMSC PARENT'S CONSENTS
1. Approval of the Federal Communications Commission
2. Export control approval by the Department of Commerce and other government
agencies, as applicable
Schedule 10.2 Page 1
Schedule 12.1(d)
LESSEE CONSENTS
Teleport License from Gibraltar
Approval of Relocated Orbit Position
Orbital Space License under the
Outer Space ▇▇▇ ▇▇▇▇ (Gibraltar) Order 1996
(Gibraltar or UK approval)
Spectrum approval and coordination
Schedule 12.1(d) Page 1
Schedule 12.1(e)
FOUNDERS AND THEIR OWNERSHIP INTERESTS
Schedule 12.1(e)
Elcor Satellites (PTY) Limited
Shareholder Number of Shares*
--------------------------------------------------- -------------------
▇▇▇▇▇▇ Family LP 8,086,307
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 8,086,307
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,917,173
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 100,000
▇▇▇▇▇ ▇. ▇▇▇▇▇ 100,000
▇.▇. ▇▇▇▇▇▇ 100,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4,624,973
▇▇▇▇▇▇ ▇▇▇▇▇ 453,622
▇▇▇▇▇▇ ▇▇▇▇▇ 453,622
Inner City Broadcasting 246,534
▇▇▇▇▇▇▇ ▇▇▇▇▇ 31,326,392
China Victory Investment Limited 1,918,592
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,329,800
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ K/A ▇.▇. ▇▇▇▇▇ 1,184,400
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ K/A ▇.▇. ▇▇▇▇▇▇ 1,184,400
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ K/A J.R. ▇▇▇▇▇▇ 1,184,400
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,664,900
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. Trust 888,300
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 1,184,400
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 1,184,400
Ratory, L.P. (a Delaware limited partnership) 1,184,400
Babacar N'Diaye 1,184,400
Investment Facility 581 (PTY) Ltd. 1,776,600
Kaydon Limited 8,883,000
PTC Holdings Limited 8,883,000
Tintagle Trading Company Limited 8,883,000
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 3,553,200
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 888,300
PTC Holdings Limited 67,119,850
Comorant Commercial Enterprises LTD 1,776,600
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,776,600
Elcor Holdings Limited 11,700,000
Skybird Limited 4,700,000
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 20,135,954
Kenly Limited 16,779,963
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 13,423,970
▇▇▇▇▇▇ Limited 16,779,963
▇▇▇▇▇ ▇▇▇▇▇▇ 9,075,493
Touch and Tutor Research and Development 1,184,790
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 592,395
--------
Total 305,500,000
--------------------------------
* Ordinary shares of R0.001 (one tenth of one cent) each
Schedule 12.1(e) Page 1
