*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Securities and Exchange Commission without the
Mark, pursuant to the Company's application requesting confidential
treatment under Rule 24b-2 under the Securties Exchange Act of 1934, as
amended.
SETTLEMENT AGREEMENT
This Settlement Agreement is made on 1-Oct-2002 by and between Globecomm
Systems Inc., a corporation organized and existing under the laws of the State
of Delaware and having its primary place of business at 45 Oser Avenue,
Hauppauge, New York 11788 (hereinafter "GSI") and Loral Skynet(R), a division of
Loral SpaceCom Corporation, a corporation organized and existing under the laws
of the State of Delaware, and having a place of business at 500 Hills Drive,
Bedminster, New Jersey 07921 (hereafter "SKYNET"); each of them referred to
individually as a "Party" and collectively as the "Parties".
WHEREAS, on 28-June-2002 GSI gave SKYNET a guaranty securing certain specified
payment obligations undertaken by GSI's wholly-owned subsidiary NetSat Express,
Inc. (hereinafter "NetSat") in an agreement between SKYNET and NetSat (the
"Skynet-NetSat Agreement") (said guaranty hereinafter referred to as the
"Corporate Guaranty"), attached hereto for reference as Attachment 1; and
WHEREAS, NetSat Express, Inc. has defaulted on its payment obligations in the
agreement underlying the Corporate Guaranty; and
WHEREAS, SKYNET has asserted its right to file claims against GSI under the
Corporate Guaranty for payments based on an acceleration clause contained in the
underlying agreement and GSI has rejected the applicability of the acceleration
clause to the Corporate Guaranty and asserted its rights to pursue its legal
remedies; and
WHEREAS, SKYNET and NetSat have agreed to terminate the agreement underlying the
Corporate Guaranty, and that it is appropriate to terminate the Corporate
Guaranty, in consideration of this Settlement Agreement and in consideration of
NetSat assigning certain agreements (hereinafter referred to as the "Customer
Contracts") to SKYNET as specified in the termination agreement between SKYNET
and NetSat; and
WHEREAS, SKYNET requires a guaranty of partial performance of one of the
contracts assigned by NETSAT under the termination agreement between SKYNET and
NETSAT and GSI has agreed to provide such a guaranty; and
WHEREAS, SKYNET and GSI desire to settle their dispute regarding the Corporate
Guaranty.
NOW THEREFORE, in consideration of the above and the mutual covenants and
agreements contained herein, GSI and SKYNET hereby agree as follows:
1. GSI shall pay SKYNET, an amount equal to [***] as full and final
settlement of any amounts which may be owed now or hereafter by GSI to
SKYNET under the Corporate Guaranty. Said settlement shall be paid in
the following manner: [***] to be paid immediately upon execution of
this Agreement; and [***] payable within ten (10) days after the
execution of this Agreement; and [***] payable upon receipt by NETSAT
of
- -------------------------------------------------------------------------------
Settlement Agreement
Page 1 of 4
25-Oct-02
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
payment from [***] for October-2002 services under the [***]
Customer Contract assigned to SKYNET by NETSAT.
Payments to be made pursuant to this Section 1 shall be made in
immediately available U.S. dollars by electronic funds wire transfer
as follows:
Wire Information: [***]
Bank Name: [***]
Bank Account: [***]
Loral Account: [***]
To ensure accuracy, GSI should also include the Account number [***].
2. Concurrently with the execution hereof, GSI and SKYNET shall enter
into a separate agreement for satellite space segment services to be
provided by SKYNET to GSI under terms as contained in Attachment 2
hereto, and an Amendment to the agreement between NetSat and SKYNET
dated 29 November 2001, as amended, assigning to GSI said agreement.
3. [***]
The indemnification provided in this paragraph 3 is subject to and
expressly conditioned on the following:
i. SKYNET shall notify GSI in writing of the nature of the claim as
soon as practicable and, in any event, not more than ten days
after SKYNET receives notice of the assertion of the claim; and
ii. GSI may, in its sole and absolute discretion, elect to take over
the defense of any claim and SKYNET shall provide GSI with all
information requested concerning the claim or the defense of the
claim and shall otherwise cooperate with GSI in GSI's defense of
the claim; and
- -------------------------------------------------------------------------------
Settlement Agreement
Page 2 of 4
25-Oct-02
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
iii. In the event GSI does not elect to take over the defense of any
claim, SKYNET shall defend the claim in the same manner that it
would defend a similar, un-indemnified claim against SKYNET, and
shall keep GSI informed of the status of the claim; and
iv. SKYNET shall not consent to the entry of any judgment, enter into
any settlement or pay any claim without first obtaining GSI's
express written consent for such entry of judgment, settlement or
payments. The indemnification provided in this paragraph 3 shall
not be deemed a waiver or limitation of any right GSI may have in
law or at equity to recover any damages or amounts, including
damages or amounts resulting from this indemnification, from
SKYNET due to SKYNET's breach of this Agreement or any other
agreement between GSI and SKYNET.
4. [***]
5. All disputes arising in connection with the present Agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
United Nations Commission of International Trade Law (UNCITRAL Rules)
by one or more arbitrators appointed in accordance with said Rules;
where said rules require the appointment of an arbitrator by an
independent organization, the Parties agree that such arbitrator shall
be appointed by the American Arbitration Association. The arbitration
shall take place in New York City, New York, USA, and shall be
conducted in English. The arbitrator shall apply the substantive (not
the conflicts) law of New York. The award shall be in United States
dollars. Judgment upon the award rendered in the arbitration may be
entered in any court having jurisdiction thereof. Each Party shall
bear its own expenses (including attorney's fees) and an equal share
of the expenses of the arbitrator and the fees of the arbitration.
Nothing in this Agreement shall be construed to preclude any party
from seeking injunctive relief in order to protect its rights pending
mediation or arbitration. A request by a party to a court for such
injunctive relief shall not be deemed a waiver of the obligation to
arbitrate.
6. General.
a. A waiver by either party of any of the terms and conditions of
this Agreement in any instance shall not be deemed or construed
to be a waiver of such term or condition for the future, or of
any subsequent breach thereof.
b. This Agreement shall be governed by and construed under the laws
of the State of New York, USA, without giving effect to its
conflict of law principles.
- -------------------------------------------------------------------------------
Settlement Agreement
Page 3 of 4
25-Oct-02
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
c. This Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties
hereto.
d. The Parties acknowledge and agree that notwithstanding anything
to the contrary contained in this Agreement, neither of them
shall transfer or assign its rights and/or obligations under this
Agreement to any third parties without the express written
consent of the other, which consent shall not be unreasonably
withheld, except for consent to the transfer or assignment of
less than the whole of the rights and/or obligations under this
Agreement, in which case it shall be reasonable for either Party
to withhold its consent. Notwithstanding the previous sentence,
SKYNET expressly shall have the right to assign this Agreement
including its rights, duties and obligations hereunder, to its
parent corporation to a bank (but only SKYNET's right to payments
hereunder may be assigned to a bank without GSI's consent), or in
connection with the merger or acquisition of its satellite
business.
e. To facilitate execution, this Agreement may be executed in two
identical counterparts; and the signature of each party shall
appear on each counterpart. Either counterpart shall constitute
an original, binding version of this Agreement. Facsimile
signatures shall have the same legal effect as original
signatures and this Agreement shall be binding upon the receipt
of facsimile signature of each of the Parties. Notwithstanding
the foregoing, each party shall deliver to the other a signed
copy bearing the former's original signature within a reasonable
period of time following execution of this Agreement.
7. This Settlement Agreement, including the Attachment 2 hereto,
constitutes the entire agreement between GSI and SKYNET relative to
payments due now or hereafter under the Corporate Guaranty, and
supercedes any other oral or written agreements, commitments or
understandings that relate to the Corporate Guaranty. The terms of
this Settlement Agreement are confidential and neither Party shall
disclose the existence or terms of this Settlement Agreement without
the prior written consent of the other, except to the limited extent
that any such disclosure is required by applicable law, rule, or
regulation, including any disclosure requirements imposed on publicly
traded companies by the Securities and Exchange Commission.
IN WITNESS WHEREOF, the Parties hereto have entered into this Settlement
Agreement as of the day and year first above written.
GLOBECOMM SYSTEMS INC. LORAL SKYNET, A DIVISION OF
LORAL SPACECOM CORPORATION
SIGNATURE: /s/ David E. Hershberg SIGNATURE: /s/ Eric Zahler
---------------------------- --------------------------
PRINTED NAME: David E. Hershberg PRINTED NAME: Eric Zahler
------------------------- -----------------------
TITLE: CEO TITLE: President
-------------------------------- ------------------------------
DATE: 25-Oct-2002 DATE: 10/25/02
--------------------------------- ------------------------------------
- -------------------------------------------------------------------------------
Settlement Agreement
Page 4 of 4
25-Oct-02
ATTACHMENT 1 - CORPORATE GUARANTY
CORPORATE GUARANTY
------------------
THIS GUARANTY is given by Globecomm Systems Inc., a Delaware
corporation with an address at 45 Oser Avenue, Hauppauge, New York 11788
(hereinafter referred to as the "Guarantor") to and in favor of Loral Skynet, a
Division of Loral SpaceCom Corporation, (hereinafter referred to as the "Secured
Party"), as of the 28th day of June 2002.
WHEREAS, the Secured Party and NetSat Express, Inc., a Delaware
Corporation having its principal place of business at 45 Oser Avenue, Hauppauge,
New York 11788 ("NetSat") are parties to that certain Agreement Concerning
Skynet Space Segment Service dated 7-March-2000, as amended (the "Agreement");
WHEREAS, NetSat is a wholly owned subsidiary of the Guarantor, and
Guarantor has agreed to ensure the performance by NetSat of certain specified
obligations under the Agreement;
WHEREAS, under the Agreement, NetSat undertakes various obligations and
responsibilities in favor of the Secured Party; and
WHEREAS, Secured Party has agreed to enter into an amendment of the
Agreement only upon execution and delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in order to induce Secured Party to enter into the
amendment of the Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. GUARANTY. Guarantor hereby unconditionally, absolutely and
irrevocably guaranties payment by NetSat of its obligations under the Agreement
for West to East Capacity transponder 4(K1) and East to West Capacity
transponder 2(K7) beginning from the date of this Guaranty and continuing
through the end of the term of the Agreement (the "Obligations"). This guaranty
is limited to the payments due under the Agreement for the transponders
specifically listed herein and shall not be extended to any other obligations or
payments due by NetSat under the Agreement. The Obligations guaranteed hereunder
are as provided in Attachment 1 hereto.
2. MODIFICATION OF OBLIGATIONS; EFFECT OF OTHER GUARANTY. The
Guarantor consents that the Obligations may from time to time, in whole or in
part, be renewed, extended, modified, accelerated, compromised, settled or
released by Secured Party; that any security or other guaranty in addition to
this Guaranty may be taken by Secured Party from the Guarantor or any other
party in order to secure the payment or performance of the Obligations; and that
any security or other guaranty taken by Secured Party from the Guarantor or any
other party to secure the payment or performance of the Obligations or any right
of setoff, may from time to time, in whole or in part, be exchanged, sold,
waived, released, surrendered or otherwise dealt with by Secured Party; all
without any notice to, further assent by, or loss of any right against, the
Guarantor and without in any way
- --------------------------------------------------------------------------------
Globecomm Systems Corporate Guaranty in favor of Loral Skynet Page 1 of 5
affecting or releasing the liability of the Guarantor hereunder, except that, in
the event any change results in an increase in the monthly recurring payments
guaranteed hereunder or the total payments due guaranteed hereunder, such
increase shall not be effective unless agreed to in writing by Guarantor.
Secured Party shall not be liable for any failure to collect or realize upon or
otherwise enforce its rights to payment or other discharge of the Obligations or
any security or other guaranty taken therefore, or any part thereof, or for any
delay in so doing, nor shall Secured Party be under any obligation to take any
action whatsoever with regard thereto.
4. NATURE OF LIABILITY. This Guaranty shall be a general, continuing,
absolute, irrevocable and unconditional guaranty of performance and payment to
the extent set forth herein, and not of collection, and nothing except the final
payment, performance and/or discharge in full of the obligations guaranteed
hereunder in accordance with the terms of the Agreement shall release Guarantor
from its liability under this Guaranty. Secured Party may, in its sole and
absolute discretion, proceed against Guarantor to enforce its rights hereunder
without being obligated to first or concurrently proceed against any other party
or under the Agreement.
5. REINSTATEMENT OF GUARANTY. This Guaranty shall continue to be
effective or be reinstated, as the case may be, with respect to Guarantor, if at
any time payment or performance, or any part thereof, of any of the Obligations
is rescinded or must otherwise be restored or returned by Secured Party upon the
insolvency or bankruptcy of NetSat or any other party liable for any of the
Obligations, or upon or as a result of the appointment of a custodian, receiver,
intervener or conservator for NetSat, such other party, or any substantial part
of the property of NetSat or such other party, or otherwise, all as though
payment or performance had not been made.
6. NO WAIVER BY SECURED PARTY OF RIGHTS AND POWERS. No failure on the
part of Secured Party to exercise, and no delay in exercising, any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by Secured Party of any right or power hereunder preclude any
other further exercise thereof or of any other right or power.
7. REPRESENTATIONS OF GUARANTOR. Acknowledging Secured Party's
reliance on all of the Guarantor's covenants, representations and warranties
contained in this Guaranty, the Guarantor represents and warrants to Secured
Party, that:
(a) Guarantor has full right, power and authority to execute,
deliver and perform this Guaranty, including all necessary approvals of its
Board of Directors;
(b) this Guaranty constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms;
(c) there is no material default under, or provision to which
Guarantor is subject that materially adversely affects its financial condition
contained in, any indenture, instrument or agreement to which Guarantor is a
party or is otherwise bound, or under or contained in any order, regulation,
ruling or requirement of a court or public body or authority by which Guarantor
is bound; and
- --------------------------------------------------------------------------------
Globecomm Systems Corporate Guaranty in favor of Loral Skynet Page 2 of 5
(d) the execution, delivery and performance of this Guaranty
does not and will not violate any provision of law, or conflict with, or result
in a breach of, any agreement to which Guarantor is a party or by which
Guarantor is bound, and does not and will not result in the creation or
imposition of any lien upon any assets or property of Guarantor.
8. COVENANTS OF GUARANTOR. The Guarantor covenants to Secured
Party that from the date of this Guaranty until all of the Obligations are paid,
performed or discharged in full, Guarantor will:
(a) take such further action as may reasonably be requested by
Secured Party to effect the purposes and intent of the Agreement including,
without limitation, the execution and delivery of any further instruments,
certificates and documents as may be reasonably requested by Secured Party for
the purposes of carrying out the terms and conditions and reflecting the
intention of and transactions contemplated by this Guaranty; and
(b) upon the occurrence of a material adverse change in the
financial condition of the Guarantor or any of its assets or property, give
prompt notice of such occurrence to the Secured Party.
9. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. This Guaranty
has been executed, delivered and accepted at Suffolk County, New York, and shall
be interpreted, construed and performed, and the rights and liabilities of the
parties hereto determined, in accordance with the laws of the State of New York,
without regard to its choice of law principles.
10. ENTIRE AGREEMENT; AMENDMENTS; SEVERABILITY. This Guaranty
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof. No amendment, waiver, discharge or termination of this
Guaranty shall be effective except by an instrument in writing duly signed by
the Guarantor. Whenever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty should be prohibited by or invalid under
applicable law, such provisions shall be ineffective to the extent of such
prohibition or invalidation, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty. The parties intend that
the terms of this Guaranty shall be enforced to the greatest extent permitted by
applicable law.
11. BINDING EFFECT. This Guaranty shall be binding upon Guarantor and
its successors and assigns and shall inure to the benefit of Secured Party, its
successors, transferees and assigns.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
covenants, representations and warranties of the Guarantor contained herein or
made in writing by the Guarantor in connection with the transactions
contemplated by Agreement shall survive the execution and delivery of this
Guaranty and any investigation at any time made by the parties hereto.
- --------------------------------------------------------------------------------
Globecomm Systems Corporate Guaranty in favor of Loral Skynet Page 3 of 5
13. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, express, certified or registered
mail, return receipt requested, with postage prepaid, or sent by a nationally
recognized overnight courier service that regularly maintains records of items
picked up and delivered, as follows:
If to Guarantor: Globecomm Systems Inc.
45 Oser Ave
Hauppauge, New York 11788
Attention: Director of Contracts
If to Secured Party: Loral Skynet
500 Hills Drive
Bedminster, NJ 07921
Attention: Dan Zaffarese, Senior
Contract Manager
or to such other person or address as the parties shall furnish to each other in
writing. Notices delivered personally shall be deemed communicated as of the
date of actual receipt, mailed notices shall be deemed communicated as of the
date two (2) days after mailing.
14. HEADINGS. The headings of the sections of this Guaranty are
inserted for convenience only and shall not constitute a part or affect in any
way the meaning or interpretation of this Guaranty.
15. REMEDIES CUMULATIVE. The remedies provided for herein shall
be cumulative and shall not preclude assertion by Secured Party of any other
rights or the seeking of any other remedies against Guarantor or any other
party.
16. COUNTERPARTS. This Guaranty may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument. This Guaranty may be delivered by
facsimile or similar electronic means and such copies shall have the same legal
effect as original signatures.
IN WITNESS WHEREOF, the undersigned has duly executed this Guaranty as
of the date first above written.
GIVEN BY: ACCEPTED BY:
GLOBECOMM SYSTEMS INC. LORAL SYNET, A DIVISION OF
LORAL SPACECOM CORPORATION
SIGNATURE: /s/ Julia Hanft SIGNATURE: /s/ Ted Corus
------------------------- ------------------------------
PRINTED NAME: Julia Hanft PRINTED NAME: Ted Corus
---------------------- ---------------------------
TITLE: Director of Contracts DATE: 7/17/02
----------------------------- -----------------------------------
- --------------------------------------------------------------------------------
Globecomm Systems Corporate Guaranty in favor of Loral Skynet Page 4 of 5
CORPORATE GUARANTY
IN FAVOR OF LORAL SKYNET
ATTACHMENT 1
PAYMENTS OF NETSAT EXPRESS, INC. GUARANTEED BY GLOBECOMM SYSTEMS INC.
In accordance with paragraph 1 of this Guaranty, the following are the sole
payments of NetSat Express, Inc. guaranteed by Globecomm Systems Inc. hereunder:
Monthly Rate
Transponder Service Satellite Term Per Transponder
- ----------------------------------------------------------------------------------------------------
[***]
- --------------------------------------------------------------------------------
Globecomm Systems Corporate Guaranty in favor of Loral Skynet Page 5 of 5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
ATTACHMENT 2 - AGREEMENT BETWEEN GSI & SKYNET
Service Description
Globecomm Systems Inc. / Telstar 6 & 12
25-Oct-02
Page 1 of 4
AGREEMENT BETWEEN
GLOBECOMM SYSTEMS INC.
AND
LORAL SKYNET(R)
CONCERNING SKYNET SPACE SEGMENT SERVICE
This Agreement is made this on _________________ by and between Globecomm
Systems Inc., a corporation organized and existing under the laws of the State
of Delaware and having its primary place of business at 45 Oser Avenue,
Hauppauge, New York 11788 (hereinafter referred to as "CUSTOMER" which
expression shall include its successors and permitted assigns) and Loral
Skynet(R), a division of Loral SpaceCom Corporation, a corporation organized and
existing under the laws of the State of Delaware, and having a place of business
at 500 Hills Drive, Bedminster, New Jersey 07921 (hereafter referred to as
"Loral Skynet" or "SKYNET"), which expression shall include its successors and
permitted assigns); each of them referred to individually as a "Party" and
collectively as the "Parties".
WITNESSETH:
WHEREAS, SKYNET has satellite capacity available for the purpose of providing
such capacity to customers; and
WHEREAS, CUSTOMER desires to obtain transponder capacity service on the Telstar
6 and Telstar 12 Satellites to be used for satellite transmission service.
NOW, THEREFORE, CUSTOMER and SKYNET, in consideration of the mutual covenants
expressed herein, agree as follows:
1. SKYNET SERVICES
1.1 SKYNET offers and CUSTOMER hereby orders SKYNET transponder service
consisting of service on one (1) 27 MHz 100 Watt Ku-Band Non-Preemptible
transponder on Telstar 6 and one (1) 54 MHz 125 Watt Ku-Band transponder
in the West-East direction on Telstar 12, for a term of service as
indicated in Section 2 ("RATES AND TERM OF SERVICE"). Such service is
composed of bare transponder capacity, with intrasatellite and
intersatellite transponder management including Tracking, Telemetry and
Control (TT&C) and maintenance of the satellite(s) used to provide the
transponder (or space segment) capacity and protection as ordered by
CUSTOMER ("the Service").
1.2 The Service is furnished to CUSTOMER subject to the Agreement which
consists of this Service Description and the following documents
attached hereto and incorporated herein by reference:
(a) General Terms and Conditions, Globecomm Systems Inc./Telstar 6 & 12
(b) Exhibit A - Circuit Parameters
(c) Exhibit B - Satellite Access Procedures
Service Description
Globecomm Systems Inc. / Telstar 6 & 12
25-Oct-02
Page 2 of 4
2. RATES AND TERM OF SERVICE
CUSTOMER shall pay a monthly rate for the Service, as set forth in Paragraph 2
of the General Terms and Conditions and the following table:
Monthly Rate
Satellite Transponder Service Term Per Transponder
- --------- ----------- ------- ---- ---------------
[***]
3. SECURITY PAYMENT
CUSTOMER shall provide security deposits in accordance with the following
schedule:
[***]
4. [***]
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
Service Description
Globecomm Systems Inc. / Telstar 6 & 12
25-Oct-02
Page 3 of 4
5. WIRE TRANSFER INSTRUCTIONS
All payments shall be made in immediately available U.S. dollars by electronic
funds wire transfer as follows, except as SKYNET may otherwise designate in
writing:
Wire Information: [***]
Bank Name: [***]
Bank Account: [***]
Loral Account: [***]
To ensure accuracy, Customer should also include its SKYNET Account number and
the invoice number for which payment is being made.
6. TRANSPONDER LOADING
The monthly rate as set forth in Paragraph 2 ("RATES AND TERM OF SERVICE") for
the Service includes intrasatellite and intersatellite transponder management
for the uplink of carriers within power and bandwidth constraints per
transponder, subject to intrasatellite and intersatellite coordination, for the
CUSTOMER's initial loading plan ("Initial Loading Plan"). Any changes to such
Initial Loading Plan shall be subject to the provisions of Paragraph 8 ("USE OF
THE SERVICE") of the General Terms and Conditions.
7. NOTICES
All notices, demands, requests, or other communications which may be or are
required to be given, served, or sent by one party to the other party pursuant
to this Agreement (except as otherwise specifically provided in this Agreement)
shall be in writing and shall be delivered by confirmed facsimile, confirmed
overnight mail, by hand or mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to CUSTOMER: Globecomm Systems Inc.
Attn: Julia Hanft, Director of Contracts
45 Oser Avenue
Hauppauge, NY 11788
Phone: 631-457-1144
Fax: 631-231-9223
Billing Contact: Globecomm Systems Inc.
Attn: Andrew C. Melfi, CFO
45 Oser Avenue
Hauppauge, NY 11788
Phone: 631-457-1131
Fax: 631-231-1557
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
Service Description
Globecomm Systems Inc. / Telstar 6 & 12
25-Oct-02
Page 4 of 4
If to SKYNET LORAL SKYNET
Attn: R. Mortellaro, Marketing & Sales Vice
President
500 Hills Drive, Room 3D09
Bedminster, NJ 07921
Phone: 908-470-2322
Fax: 908-470-2459
Copy to: LORAL SKYNET
Attn: Dan Zaffarese, Senior Contract Manager
500 Hills Drive, Room 3D09
Bedminster, NJ 07921
Phone: 908-470-2352
Fax: 908-470-2599
Either party may designate by notice in writing a new address or addressee, to
which any notice, demand, request, or communication may thereafter be so given,
served or sent. Each notice, demand, request, or communication which shall be
delivered, shall be deemed sufficiently given, served, sent or received for all
purposes at such time as it is delivered to the addressee named above as to each
party, with the signed messenger receipt, return receipt, or the delivery
receipt being deemed conclusive evidence of such delivery.
8. ENTIRE AGREEMENT
This Agreement along with matters incorporated herein by reference, constitutes
the entire agreement between CUSTOMER and SKYNET relative to the Service, and
this Agreement can be altered, amended or revoked only by an instrument in
writing signed by both CUSTOMER and SKYNET. CUSTOMER and SKYNET agree hereby
that any prior or contemporaneous oral and written agreements between and among
themselves and their agents and representatives relative to the subject of this
Agreement are superseded and replaced by this Agreement. Any provision of this
Agreement found to be unenforceable or invalid by a court of competent
jurisdiction shall in no way affect the validity or enforceability of any other
provision except that if such invalid or unenforceable provision provided a
material benefit to a party hereto, such party shall have the right to terminate
the Agreement without liability to the other.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the day and year first above written, and agree to the terms and conditions set
forth herein.
GLOBECOMM SYSTEMS INC. LORAL SKYNET, A DIVISION OF LORAL
SPACECOM CORPORATION
Signature: Signature:
------------------------- ---------------------------
Printed Name: Printed Name:
---------------------- ------------------------
Title: Title:
----------------------------- -------------------------------
Date: Date:
------------------------------ --------------------------------
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 1 of 12
GENERAL
TERMS AND CONDITIONS
OF THE
AGREEMENT BETWEEN
CUSTOMER
AND
LORAL SKYNET
CONCERNING SKYNET(R) CAPACITY
1. WARRANTY EXCLUSIONS
SKYNET WARRANTS TO CUSTOMER THAT SKYNET WILL PERFORM THE SERVICES
DEFINED HEREIN IN ACCORDANCE WITH GENERALLY ACCEPTED INDUSTRY STANDARDS AND IN
ACCORDANCE WITH THE CIRCUIT PARAMETERS ATTACHED HERETO AS EXHIBIT A. SUBJECT TO
THE ABOVE, SKYNET, ITS PARENT, THEIR SUBSIDIARIES AND THEIR AFFILIATES,
SUBCONTRACTORS AND SUPPLIERS MAKE NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
PERFORMANCE OF THE SERVICE, AND SPECIFICALLY DISCLAIM ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
2. PAYMENT OF CHARGES
A monthly charge applies each month or fraction thereof that Service is
furnished. Monthly charges start on the first day the Service begins pursuant to
Section 1 ("SKYNET SERVICES") of the Service Description. Charges accrue through
and include the day that the Service is discontinued. When the billing date and
the date that the Service is started, changed, or discontinued do not coincide,
the charges will be adjusted to reflect the fractional part of the month
involved. Any day or part thereof in which Service is provided shall be
considered a full day. Any Service provided in a day (beginning and ending as
determined by Greenwich Mean Time ("GMT")) shall be considered to have been
rendered for a full day. Partial monthly billing is based on the actual number
of days in each month. Monthly charges will be billed during the first week of
each month in which service is being provided; payment is due on or before the
first day of the following month, as specified on the bill. Service may be
discontinued for nonpayment of bill ten (10) days beyond notice of payment past
due. All payments by CUSTOMER to SKYNET hereunder shall be made in U.S. dollars;
shall be deemed to be made upon receipt of collected funds by SKYNET; and shall
be made via bank wire transfer to the bank account designated by SKYNET in
Section 4 of the Service Description. Any and all transfer, exchange or similar
fees associated with the payment of the bill are the responsibility of CUSTOMER.
2.1 SECURITY PAYMENT
To safeguard its interests, SKYNET requires Customers to remit a
security deposit. The amount of the security deposit and the date due are as
specified in Section 3 of the Service Description ("SECURITY PAYMENT"). Failure
to remit such required security payment in a timely manner shall be considered a
material breach of this Agreement. Such deposit will be held as a guarantee for
the payment of any or all charges due hereunder. This security deposit does not
relieve the Customer of the responsibility for the prompt payment of bills upon
presentation. The security deposit will be held by SKYNET and applied to the
Customer's final bill(s). All of the security deposit amount in excess of the
last billed amounts will be refunded to the Customer upon the expiration or
earlier termination of this Agreement.
3. INTEREST ON LATE PAYMENTS
In the event any payment is not received from CUSTOMER on the due date
therefore, SKYNET reserves the right to add interest on the late payments at the
rate of eighteen percent (18%) per annum, or the highest legally permissible
rate of interest, whichever is lower, and all interest or discounting shall be
compounded on a monthly basis. Such late payments, including interest, shall be
payable with the amount due and calculated from the date payment was due until
the date it is received by SKYNET. SKYNET shall provide separate invoices for
any interest charged, or shall detail interest as a separate line item on
invoices for services.
4. TAXES
4.1 Other than for taxes on SKYNET's net income,
LORAL is a registered trademark of Loral Space and Communications
Corporation/Ltd.
SKYNET and its logo are registered trademarks of Loral SpaceCom
Corporation.
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 2 of 12
CUSTOMER agrees to pay all applicable use, excise, sales,
privilege, gross receipts, Universal Service Fund assessments,
use and transfer taxes, similar taxes, duties, imposts, levies,
value-added taxes, fees, assessments (including government and/or
signatory "mark-up" on service(s)) or similar liabilities however
denominated, ("Taxes") that are or may be directly levied by any
applicable government authority on account of the Service or
payments made under this Agreement, on or after the consummation
of this Agreement. Taxes are not included in the charges for
service and will be separately stated on CUSTOMER's invoice or
statement of account. CUSTOMER may in good faith and by
appropriate legal proceedings contest the validity, applicability
or amount of any Taxes assessed or levied under the foregoing
provisions, and SKYNET agrees to cooperate with CUSTOMER in any
such contest and will permit CUSTOMER to contest the same, at
CUSTOMER's cost and expense. Should SKYNET pay or be required to
pay these Taxes, CUSTOMER shall promptly reimburse SKYNET for
such payments upon receipt of an invoice from SKYNET.
4.2 Notwithstanding anything to the contrary contained in this
Agreement, the nonpayment of any such contested Taxes by CUSTOMER
in connection with such contest shall not be deemed a default
hereunder until final determination (including appeals) in such
contest and expiration of any date established for filing an appeal
therein, except that it shall be a default if SKYNET has been
required to pay such Taxes and CUSTOMER does not promptly reimburse
SKYNET as set forth in 4.1 above. In the event CUSTOMER initiates
or directs SKYNET to initiate any contest of the TAXES, CUSTOMER
agrees to indemnify SKYNET for any interest or penalty assessed on
Taxes finally adjudged to be due and owing by the appropriate
local, state, national or federal tax authority.
5. NON-PREEMPTIBLE SERVICE
"Non-Preemptible" Service is not protected in the event of Failure as
defined in Section 6 ("SERVICE INTERRUPTION OR FAILURE") hereof. In the event
any non-protected Service provided hereunder becomes a Failure as defined in
Section 6 ("SERVICE INTERRUPTION OR FAILURE"), SKYNET may, in its sole
discretion, attempt to restore Service on the satellite. If SKYNET is unable to
restore Service on the satellite at the time of such failure, then SKYNET may,
in its sole discretion, offer to restore the Service on an available transponder
of the same frequency band, having the same bandwidth and the same or different
power as the failed transponder, on the same satellite or on another SKYNET
satellite then in orbit. However, if SKYNET offers to restore the affected
Service on a satellite other than the satellite on which the failed Service was
provided, then CUSTOMER may reject Service on such other satellite with notice
to SKYNET within twenty four (24) hours of SKYNET having offered such Service to
CUSTOMER. If SKYNET does not restore or attempt to restore Service, or CUSTOMER
rejects such restoration, the Failed Service will terminate as of the moment of
the Failure pursuant to Section 19.3 hereof
6. SERVICE INTERRUPTION OR FAILURE
6.1 Interruption - for the purpose of this Agreement an interruption
("Interruption") shall be defined as any period during which the
Service fails to meet the circuit parameters set forth in Exhibit A
("CIRCUIT PARAMETERS") attached hereto and incorporated by
reference, as measured by SKYNET at its applicable earth station,
such that the Service is unavailable for its intended commercial
purpose
6.2 Failure - for the purpose of this Agreement a failure ("Failure")
shall be defined as any of the following:
a) the inability, for any period of sixty (60) consecutive minutes,
to pass signals through a transponder when it is illuminated with
any authorized transmitted carrier, or
b) an Interruption for any period of twenty four (24) consecutive
hours, or
c) ten (10) or more Interruptions of at least one (1) minute or
longer per occurrence within any period of thirty (30)
consecutive days.
For purposes of this Section 6 ("SERVICE INTERRUPTION OR FAILURE"),
measurement of periods of Interruption or Failure shall commence only
upon CUSTOMER's written or verbal notification to SKYNET's applicable
earth station and CUSTOMER having vacated its signal from the affected
transponder to permit SKYNET's verification of the existence of the
Interruption or Failure or at the time identified by SKYNET in any
notice it provides to CUSTOMER.
6.3 The following shall not constitute an Interruption or Failure:
(i) Service Testing - As described in Section 7.1 herein.
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 3 of 12
(ii) Emergency Testing - As described in Section 7.2 herein.
(iii) The inability to provide the Service due to a Force Majeure
condition as described in Section 9.5, hereof.
7. TESTING
7.1 Service Testing - SKYNET may perform service testing by providing a
minimum of forty-eight (48) hours prior notice to CUSTOMER and
after making reasonable efforts to coordinate such testing with
CUSTOMER to minimize disruption of CUSTOMER's use of the Service.
SKYNET shall limit such testing to circumstances in which testing
is necessary to maintain or initiate new service on the Serving
Satellite, to properly coordinate with other satellite users or
operators, or to otherwise prudently manage its satellites while
minimizing Service Testing to the greatest extent possible;
7.2 Emergency Testing - SKYNET may, at its sole discretion, perform
Emergency Testing after providing CUSTOMER as much notice as is
reasonably possible under the circumstances, and only for the
purpose of restoring, or determining the cause of a failure of a
component or subsystem on the Serving Satellite, in response to an
order of a court with valid jurisdiction or the FCC, to determine
the cause or source of interference, and/or to protect the overall
satellite performance.
8. USE OF THE SERVICE
The monthly rate as set forth in Section 2 ("RATES AND TERM OF
SERVICE") of the Service Description includes management for the uplink of
carriers to the transponder(s) provided hereunder for CUSTOMER's initial loading
plan ("Initial Loading Plan"). If CUSTOMER desires to transmit to any
transponder in any manner different ("Different Loading Plan") than its Initial
Loading Plan, then the following shall apply:
(i) If the Different Loading Plan involves Digital Carriers, then
CUSTOMER shall provide the Different Loading Plan to SKYNET, no
later than fourteen (14) days prior to the start date of such
Different Loading Plan, identifying its characteristics. In the
event that SKYNET is required to perform any maintenance or
troubleshooting activity involving the affected Service,
CUSTOMER must furnish the Different Loading Plan on demand, and
(ii) If the Different Loading Plan involves the addition of or
changes to an FM Television Carrier or any Other Type Of
Carrier, then CUSTOMER shall provide a written request to
SKYNET, no less than sixty (60) days prior to the desired start
date of such Different Loading Plan, identifying the
characteristics, and the desired start date of such Different
Loading Plan. SKYNET shall coordinate such proposed Different
Loading Plan to determine if its use could reasonably be
expected to result in either intrasatellite or intersatellite
interference, and, based on the results of such coordination,
SKYNET shall either authorize or reject, the use of such
proposed Different Loading Plan, in a timely fashion, in writing
to CUSTOMER. Such authorization shall not be unreasonably
withheld.
(iii) Notwithstanding anything in this Agreement to the contrary,
CUSTOMER may obtain SKYNET's authorization for more than one
Different Loading Plan for any transponder provided hereunder,
for any period of time, during the term of this Agreement.
(iv) In the event that CUSTOMER uplinks to any transponder in any
manner different from that authorized by SKYNET ("Unauthorized
Loading Plan") pursuant to either its Initial Loading Plan or
any other authorized Different Loading Plan for the affected
transponder, whether analog or digital, SKYNET may, in its sole
discretion, require CUSTOMER to discontinue the use of such
Unauthorized Loading Plan until such time as SKYNET authorizes
the use of such uplink such that it becomes a Different Loading
Plan pursuant to the provisions of this Agreement, including by
way of illustration and not of limitation, Section 8 hereof
("USE OF THE SERVICE").
9. LIMITATION OF LIABILITY
9.1 WITH RESPECT TO ANY CLAIM OR SUIT, BY CUSTOMER OR BY ANY OTHERS,
FOR DAMAGES ASSOCIATED WITH THE INSTALLATION, PROVISION,
TERMINATION, MAINTENANCE, REPAIR OR RESTORATION OF SERVICE, AND
SUBJECT TO SECTIONS 9.2. AND 9.5. FOLLOWING, SKYNET'S LIABILITY, IF
ANY, SHALL NOT EXCEED AN AMOUNT EQUAL TO THE PROPORTIONATE CHARGE
PROVIDED FOR
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 4 of 12
UNDER THIS AGREEMENT FOR THE SERVICE FOR THE PERIOD DURING WHICH
THE SERVICE WAS AFFECTED, BUT IN NO CASE SHALL EXCEED
$100,000.00. THIS LIABILITY FOR DAMAGES SHALL BE IN ADDITION TO
ANY AMOUNTS THAT MAY OTHERWISE BE DUE CUSTOMER UNDER THIS
AGREEMENT AS A CREDIT ALLOWANCE FOR INTERRUPTIONS DESCRIBED
HEREIN.
9.2 SKYNET IS NOT LIABLE FOR DAMAGES ASSOCIATED WITH SERVICE, CHANNELS,
OR EQUIPMENT, THAT IT DOES NOT FURNISH.
9.3 SKYNET, ITS PARENT, THEIR SUBSIDIARIES AND AFFILIATES, AND THE
DIRECTORS, EMPLOYEES, AGENTS AND SUBCONTRACTORS OF ALL OF THEM,
SHALL BE INDEMNIFIED, DEFENDED, AND HELD HARMLESS BY CUSTOMER
AGAINST ALL CLAIMS, LOSSES, OR DAMAGES RESULTING FROM THE USE OF
SERVICES FURNISHED PURSUANT TO THIS AGREEMENT, INVOLVING:
9.3.1. CLAIMS FOR LIBEL, SLANDER, INVASION OF PRIVACY,
INFRINGEMENT OF COPYRIGHT, OR ANY CLAIM BASED ON THE
CONTENT OF ANY TRANSMISSION ARISING FROM ANY COMMUNICATION;
9.3.2. CLAIMS FOR PATENT INFRINGEMENT ARISING FROM COMBINING OR
USING THE SERVICE FURNISHED BY SKYNET IN CONNECTION WITH
FACILITIES OR EQUIPMENT FURNISHED BY OTHERS; OR
9.3.3. ALL OTHER CLAIMS ARISING OUT OF ANY ACT OR OMISSION OF
OTHERS RELATING TO SERVICES PROVIDED PURSUANT TO THIS
AGREEMENT.
9.4 NO LICENSE UNDER PATENTS (OTHER THAN THE LIMITED LICENSE TO USE) IS
GRANTED BY SKYNET OR SHALL BE IMPLIED OR ARISE BY ESTOPPEL, WITH
RESPECT TO ANY SERVICE OFFERED UNDER THIS AGREEMENT. SKYNET WILL
DEFEND CUSTOMER AGAINST CLAIMS OF PATENT INFRINGEMENT ARISING
SOLELY FROM THE USE BY CUSTOMER OF SERVICES OFFERED UNDER THIS
AGREEMENT AND WILL INDEMNIFY CUSTOMER FOR ANY DAMAGES AWARDED BASED
SOLELY ON SUCH CLAIMS.
9.5 SKYNET SHALL NOT BE LIABLE FOR SERVICE INTERRUPTIONS RESULTING FROM
ANY CAUSES BEYOND ITS REASONABLE CONTROL, INCLUDING, BUT NOT
LIMITED TO, ACTS OF GOD, FIRE, FLOOD, ADVERSE WEATHER CONDITIONS,
METEOROLOGICAL OR ATMOSPHERIC OCCURRENCES OR DISTURBANCES
(INCLUDING, BUT NOT LIMITED TO, SUN OUTAGES) OR OTHER NATURAL
EVENTS, AN IRREPARABLE SATELLITE COMPONENT FAILURE, REGARDLESS OF
THE CAUSE(S) OF SUCH FAILURE, EXTERNALLY-CAUSED INTERFERENCE, ACTS
OF GOVERNMENT (INCLUDING, BUT NOT LIMITED TO, ANY LAW, RULE, ORDER,
REGULATION OR DIRECTION OF THE UNITED STATES GOVERNMENT OR OF ANY
OTHER GOVERNMENT, OR OF ANY INSTRUMENTALITY THEREOF, OR OF ANY
CIVIL OR MILITARY AUTHORITY); NATIONAL EMERGENCIES; INSURRECTIONS;
RIOTS; ACTS OF WAR; CIVIL DISORDER; QUARANTINE RESTRICTIONS;
EMBARGOES, STRIKES, LOCKOUTS, WORK STOPPAGES, LABOR DIFFICULTIES,
OR ACTS OR OMISSIONS OF CUSTOMER OR ITS EMPLOYEES, AGENTS OR
CONTRACTORS. EACH SUCH EVENT SHALL CONSTITUTE A FORCE MAJEURE.
IN THE EVENT OF AN INTERRUPTION OR FAILURE AS DEFINED IN SECTION
6 HEREOF ("SERVICE INTERRUPTION OR FAILURE") THAT WOULD OTHERWISE
QUALIFY FOR A CREDIT ALLOWANCE (AS DEFINED IN SECTION 11, HEREOF
"CREDIT ALLOWANCE") BUT FOR THE FACT THAT SUCH INTERRUPTION OR
FAILURE RESULTED FROM A FORCE MAJEURE, SKYNET'S OBLIGATION TO
PROVIDE THE SERVICE AND CUSTOMER'S OBLIGATION TO PAY FOR THE
SERVICE NOT YET PROVIDED WILL BE SUSPENDED UNTIL (I) THE SERVICE
IS RESTORED; (II) SKYNET OFFERS TO PROVIDE ALTERNATIVE SERVICE
THAT COMPLIES WITH THE CIRCUIT PARAMETERS, OR (III) UNTIL 30 DAYS
HAVE ELAPSED, WHICHEVER IS LESS. IF WITHIN SUCH THIRTY (30) DAY
PERIOD SKYNET IS ABLE TO EFFECT (I) OR (II) ABOVE, THE PARTIES'
RESPECTIVE OBLIGATIONS HEREUNDER SHALL BE REINSTATED FOR THE
REMAINDER OF THE TERM OF THIS AGREEMENT. IF SERVICE IS NOT
REINSTATED AT THE END OF SUCH 30-DAY PERIOD, EITHER PARTY MAY
TERMINATE THIS AGREEMENT BY PROVIDING WRITTEN NOTICE THEREOF.
9.6 NOTWITHSTANDING ANYTHING TO THE
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 5 of 12
CONTRARY, SKYNET SHALL NOT BE LIABLE FOR INCIDENTAL, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR LOST PROFITS, SAVINGS OR
REVENUES OF ANY KIND, WHETHER OR NOT SKYNET HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
10. LAUNCH SERVICES
To the extent required by the launch services provider for launch
services provided in connection with the launch of any satellite(s) contemplated
by this Agreement, CUSTOMER shall have no right of action against the launch
services contractor, other third party customers of the launch services
contractor or their respective associates, for any loss or damage including, but
not limited to, damage for bodily harm (including death) and damage to property
suffered by CUSTOMER resulting from the performance of the launch services
agreement by such parties. CUSTOMER further irrevocably agrees to a no-fault, no
subrogation waiver of liability, and waives the right to make any claim or to
instigate any judicial proceeding in connection with such claim, against the
launch services contractor or their associates, in each case for any such damage
suffered by CUSTOMER resulting from the performance of the launch services
agreement by such parties. In the event that one or more associates of CUSTOMER
(in their capacities as such) shall proceed against the launch services
contractor, the third party customers or their associates as a result of any
such damage suffered by CUSTOMER and caused by the launch services contractor,
the third party customers or their associates resulting from the performance of
the launch services agreement by such parties, CUSTOMER shall indemnify, hold
harmless, dispose of any such claim and defend, when not contrary to the
governing rules of procedures where the action takes place, the launch services
contractor, such third party customers and their associates from any loss,
damage, liability or expense, including reasonable attorney's fees, on account
of such damage, injury or death, and shall pay all expenses and satisfy all
judgments that may be incurred by or rendered against said indemnities in
connection with such proceeding. As used herein, (i) the term "associates"
means, with respect to any person, individuals or legal entities which act,
directly or indirectly, on behalf of or at the direction of such person to
fulfill the obligations of such person, including such person's employees,
suppliers and subcontractors (when so acting) and (ii) the term "third party
customers" means other customers of the launch services contractor that use the
launch services contractor's launch services for the same launch.
11. CREDIT ALLOWANCES
11.1 Credit allowances, may be given to CUSTOMER for Interruptions
and/or Failures as defined in Section 6 ("SERVICE INTERRUPTION OR
FAILURE") above. These credit allowances will be applied against
future payments or in the event of such Interruption or Failure
during the final month of Service will result in a refund equal to
the amount of the credit allowance. An Interruption or Failure
period begins when CUSTOMER reports the service to be Interrupted
or Failed and releases the affected Service for testing and repair
or at the time identified by SKYNET in any notice it provides to
CUSTOMER. An Interruption or Failure period ends when the Service
is operative. If CUSTOMER reports a Service to be Interrupted or
Failed but declines to release it for testing and repair, it is
considered to be impaired, but not Interrupted or Failed. For
calculation of such credit allowance each month is considered to
have thirty (30) days. Credit allowances are given for each
incidence of Interruption or Failure of more than thirty (30)
minutes and are given in one-minute increments. Specific one minute
Credit Allowances will be calculated based on the monthly charge
for the affected Service. Credit Allowances will not be given for
Interruptions or Failures that are a result of any of the following
reasons:
(a) Interruptions or Failures caused by the action or failure to
act of CUSTOMER or others authorized by CUSTOMER to use the
affected Service, not pursuant to the directions of SKYNET.
(b) Interruptions or Failures during periods when CUSTOMER
elects not to release the affected Service for testing.
(c) Interruptions or Failures due to the effects of sun transit
on receiving earth stations.
(d) The inability to pass signals through a transponder due to a
Force Majeure condition as described in Section 9.5 hereof.
11.2 SKYNET shall have the right to charge CUSTOMER for work carried out
by SKYNET to locate, rectify and/or repair any fault(s) (i) not
directly caused by any SKYNET provided Service, channel or
equipment, (ii) if such fault(s) result from CUSTOMER's willful
act, fault, or negligence, or (iii) if such fault(s) result from
CUSTOMER's failure to comply with its obligations hereunder. In any
such case as described in this Section 11.2, notwithstanding
anything herein to the contrary, Credit Allowances will not be
given.
12. CONTENT OF TRANSMISSIONS
CUSTOMER is solely responsible for the content of transmissions using
the Service.
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 6 of 12
13. SCRAMBLING
Prior to commencing use of the Service provided under this Agreement,
CUSTOMER, at its expense, shall provide SKYNET with any unscrambling devices
that may be required for signal monitoring. CUSTOMER shall not use, or allow the
use of, the Service provided hereunder for distribution of program material of a
sexual or adult-oriented nature, to television viewers unless the programming is
scrambled such that television viewers can receive the programming only through
the use of an unscrambler authorized by CUSTOMER or CUSTOMER's authorized agent.
14. REFUSAL OF SERVICE
SKYNET may terminate, prevent or restrict any communications using the
Service as a means of transmission if such actions (a) are undertaken at the
direction of a governmental agency with jurisdiction, including the Commission;
or (b) are taken subsequent to the institution against SKYNET, CUSTOMER or any
permitted assignees, any legal entity affiliated with any of them, or any of the
directors, officers, agents or employees of the parties, permitted assignees or
their affiliates, of criminal or administrative proceedings or investigations
based upon the content of such communications, other than civil proceedings.
SKYNET shall coordinate with CUSTOMER in good faith to assist in the resolution,
if possible, of any such matters and will not terminate, prevent or restrict
CUSTOMER's transmissions pursuant to this Paragraph if, upon notification by
SKYNET of the institution of such proceedings, CUSTOMER is able to satisfy
SKYNET, subject to SKYNET's sole and reasonable discretion, that (c) within
forty-eight (48) hours the aforementioned proceedings have been or will be
resolved to SKYNET's satisfaction; or (d) the relevant transmissions will
terminate in the relevant jurisdiction and that they will not re-occur in the
relevant jurisdiction. Nothing in this Paragraph shall affect any other term or
condition hereof, including, without limitation, any obligation under Paragraph
9 hereof.
15. ASSIGNMENT/RESALE
15.1 ASSIGNMENT
CUSTOMER acknowledges and agrees that notwithstanding anything to the
contrary contained in this Agreement, CUSTOMER shall not transfer or assign its
rights and/or obligations under this Agreement to any third parties without
SKYNET's consent, which shall not be unreasonably withheld, except for consent
to the transfer or assignment of less than the whole of CUSTOMER's rights and/or
obligations under this Agreement, in which case it shall be reasonable for
SKYNET to withhold its consent. SKYNET expressly shall have the right to assign
this Agreement including its rights, duties and obligations hereunder, to its
parent corporation or any present or future affiliate or subsidiary of SKYNET,
to a bank, or in connection with the merger or acquisition of its satellite
business.
15.2 RESALE
For as long as this Agreement is not assigned, the following applies:
To the extent not otherwise prohibited by rule, regulation or law, in
the event CUSTOMER desires to resell all or any part of the Service to a third
party, CUSTOMER is approved to do. CUSTOMER shall be solely responsible for any
permitted resale and shall indemnify and hold SKYNET harmless for any claim or
liability for damages made by any third party in connection with such resale.
If this Agreement is assigned to any party other than a successor in
interest or present or future affiliate or subsidiary of CUSTOMER, the following
applies:
To the extent not otherwise prohibited by rule, regulation or law, in
the event CUSTOMER desires to resell all or any part of the Service to a third
party, CUSTOMER shall notify SKYNET in writing no less than thirty (30) days
prior to the scheduled date of such resale, that it has an agreement to permit a
third party to use all or any part of the Service. SKYNET shall notify CUSTOMER
in writing within fifteen 15 days of receipt of the aforementioned notification,
advising CUSTOMER of SKYNET's decision to either allow the resale to such third
party, or not to allow the resale. CUSTOMER shall be solely responsible for any
permitted resale and shall indemnify and hold SKYNET harmless for any claim or
liability for damages made by any third party in connection with such resale.
16. NON-INTERFERENCE
CUSTOMER's radio transmissions (and those of its uplinking agents) to
the satellite shall comply, in all material respects, with all governmental
(whether national, international, federal, state, municipal, or otherwise)
statutes, laws, rules, regulations, ordinances, codes, directives and orders, of
any such governmental agency, body, or court (collectively "Laws") applicable to
it regarding the operation of the satellite, transponder, space segment, and any
backup satellite, transponder or space segments to which CUSTOMER is given
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 7 of 12
access pursuant to this Agreement. CUSTOMER shall not interfere with the use of
any other satellite, transponder or space segment or cause physical harm to the
satellite, transponder or any backup satellite, transponder or space segment to
which CUSTOMER is given access pursuant to this Agreement, or any other
satellite, transponder or space segment. Further, CUSTOMER will coordinate with
(and will require its uplinking agents to coordinate with) SKYNET, in accordance
with procedures reasonably established by SKYNET and uniformly applied to all
users of satellites, transponders and / or space segments, its transmissions to
the satellite, so as to minimize adjacent transponder, space segment and
adjacent satellite interference. For purposes of this Section 16, interference
shall also mean acts or omissions that cause a Service to fail to meet its
Circuit Parameters. Without limiting the generality of the foregoing, CUSTOMER
(and its uplinking agents) shall comply with all U.S. Federal Communications
Commission ("FCC") rules and regulations regarding use of automatic transmitter
identification systems (ATIS).
17. IMPROPER ILLUMINATION
SKYNET transmission parameters are as set forth in Exhibit B
("SATELLITE ACCESS PROCEDURES"), attached hereto and incorporated by reference.
Improper Illumination shall include transmissions that are other than as
described in Exhibit B, transmissions at an incorrect frequency, transmissions
at excessive power levels or any illumination which can cause harm or
interference to any transponder, space segment or to any satellite. In the event
improper illumination of any transponder and / or space segment provided under
this Agreement is detected by SKYNET, CUSTOMER shall be notified and CUSTOMER
shall take immediate corrective action to stop the improper illumination within
five (5) minutes of notification from SKYNET. A charge of eleven hundred
($1,100.00) dollars per minute will apply for improper illumination that
continues beyond the five minute period after notification, or attempted
notification if there is no answer at the telephone number provided by CUSTOMER.
Furthermore, if immediate corrective action is not taken by CUSTOMER, SKYNET
shall have the right to take immediate action to protect its services or its
interests, including but not limited to suspending or terminating CUSTOMER's
Service on the affected transponder and / or space segment. If Service is
terminated, CUSTOMER is responsible to pay for Service received through the time
of termination.
18. GENERAL OBLIGATIONS
In the event CUSTOMER breaches any of its material obligations in
connection with the usage procedures and restrictions described in this
Agreement, including, without limitation, Service usage, non-interference,
government regulations, preemptive rights, and no-transfer, then SKYNET may, in
its sole discretion and in addition to the exercise of its other rights against
CUSTOMER, require CUSTOMER to cease transmissions to any or all of the affected
transponder(s) provided hereunder and take any actions necessary to enforce
SKYNET's rights. CUSTOMER will pay to SKYNET all expenses (including attorney's
fees) incurred in connection with SKYNET's enforcement against CUSTOMER arising
out of CUSTOMER's use of the affected Service(s).
19. TERMINATION
This Agreement may be terminated prior to the end of its term as
follows:
19.1 In the event of the breach of any of the material terms and
conditions, representations and warranties contained herein, the
non-breaching party may terminate upon written notice to the other
citing the cause of such termination and providing such party with a
fifteen (15) day cure period.
19.2 In the event that the satellite on which the Service is intended to be
provided fails to reach and maintain a satisfactory orbit in the
appropriate orbital position, or a failure by said satellite to go
into satisfactory operation after achieving satisfactory orbit in the
appropriate orbital position (any or all of the foregoing in this
Section 19.2 being referred to herein as a "Launch Failure"), either
party may terminate this Agreement with written notice to the other
party and neither party will have any further liability to the other
party except for SKYNET's liability to refund to CUSTOMER any monies
paid to SKYNET for Service not received.
19.3 In the event of a Failure, as defined in Section 6, hereof (SERVICE
INTERRUPTION OR FAILURE), of any Service for which SKYNET does not
provide an acceptable restoration, as defined in Section 5 hereof,
within (30) thirty days, the CUSTOMER or SKYNET may terminate this
Agreement without liability except for such Service as has already
been received. The termination date will be considered to be the date
of the Failure. SKYNET shall not be entitled to terminate this
Agreement for a failure that consists of a de minimis deviation from
the Performance Parameters in Exhibit A.
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 8 of 12
20. EARLY TERMINATION
LORAL SKYNET PROPRIETARY
20.1 Subject to Section 19 ("TERMINATION"), hereof, if this Agreement is
terminated by SKYNET due to CUSTOMER's material breach prior to the
termination date set forth in Section 1 ("SKYNET SERVICES") of the
Service Description, SKYNET may, at its sole discretion, upon the
conclusion of the required cure period, exercise one or more of the
following remedies:
A. Temporarily suspend the Service to CUSTOMER (either completely or
with respect to any one or more Termination Sites) without
terminating this Agreement until CUSTOMER cures the default,
during which suspension CUSTOMER shall continue to remain liable
for all charges and other amounts payable in accordance with the
terms hereof; or
B. Terminate this Agreement, and require CUSTOMER to immediately pay
to SKYNET as liquidated damages for default of this Agreement and
not as a penalty, an amount equal to [***]
for the terminated portion of the Services, plus all other
Charges and fees that had accrued prior to the date of
termination, together with all other costs and expenses of
collection, including reasonable attorneys' fees.
20.2 [***]
20.3 Any termination charges that may be assessed pursuant to this Section
20 shall be due and payable upon receipt by CUSTOMER of an invoice for
such charges. Early termination charges apply regardless of whether or
not Service has begun and are in addition to any other rights SKYNET
may have hereunder.
21. CHANGES IN OPERATIONS OR PROCEDURES
SKYNET is not responsible to CUSTOMER if a change in operations,
procedures, or Transmission Parameters (i) affects any facilities, CUSTOMER
equipment or CUSTOMER communications system in any way, or (ii) requires their
modification in order to be used with the Service provided pursuant to this
Agreement. However, if such changes can be reasonably expected to materially
affect the operating or transmission characteristics of the Service, or render
any CUSTOMER equipment or CUSTOMER communications system incompatible with the
Service, SKYNET shall use reasonable efforts to provide adequate notice, in
writing, to allow CUSTOMER an opportunity to maintain uninterrupted service.
SKYNET shall have no obligation to change or modify any of its components,
operations or procedures to be compatible with CUSTOMER.
22. TRANSPONDER ASSIGNMENT
Assignment of the specific space segment, transponder and/or satellite
to be used for the Service remains the sole prerogative of SKYNET. During the
term of this Agreement SKYNET shall have the right to change any of the space
segment, transponder and/or satellite assignments, but shall do so only if there
is an operational concern, interference caused by CUSTOMER, or in order to
protect the health of the satellite on which Service is being provided. If
required, SKYNET will use reasonable efforts to give CUSTOMER not less than
thirty (30) days prior written notice to CUSTOMER. Upon the effectiveness of
such assignment change, the CUSTOMER must vacate the previously occupied
frequencies. If such assignment changes results in CUSTOMER necessarily being
required to make equipment changes, SKYNET will reimburse CUSTOMER for actual
costs associated with such changes to a maximum of two (2) months of monthly
recurring charges.
LORAL SKYNET PROPRIETARY
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 9 of 12
23. FCC, OTHER GOVERNMENT, OR AGENCY THEREOF,
COMPLIANCE
If at any time SKYNET can no longer comply fully with the provisions
of this Agreement because of FCC or other government or agency thereof rules and
regulations which are inconsistent with this Agreement, CUSTOMER may either (1)
terminate immediately this Agreement without any liability whatever by giving
notice in writing within sixty (60) days of such action or (2) negotiate with
SKYNET so to modify this Agreement as to conform with such new rules and
regulations. If CUSTOMER elects to terminate in such event, SKYNET shall refund
promptly any sums previously paid to SKYNET for Service not rendered.
24. NO POSSESSORY INTEREST / BANKRUPTCY
CUSTOMER has, and will have, no possessory or other interest in the
transponder(s) used to provide Service pursuant to this Agreement. CUSTOMER
acknowledges that: (1) it has been advised of and fully understands the
conditions and the consideration pursuant to which SKYNET provides and CUSTOMER
accepts the Service and (2) the rates for the Service, as well as the
termination charges as provided for in Section 20 (`EARLY TERMINATION") hereof,
are fair and reasonable at the market on the date of commitment to the Service
and the date of this Agreement. CUSTOMER recognizes that the transponder used
for the provision of the Service contemplated under this Agreement is a
commodity in limited supply and that those using full time transponder service,
similar to the Service provided under this Agreement, usually enter into
long-term commitments with service providers. Therefore, CUSTOMER understands
that its acceptance of the Service precludes SKYNET from accepting any other
customer for Service on the transponder(s) being used to provide Service to
Customer. Because of this, CUSTOMER concedes that a failure to fulfill
CUSTOMER's obligations under this Agreement would irreparably harm SKYNET.
Therefore, in the event of any bankruptcy or similar proceeding on the part of
CUSTOMER, CUSTOMER agrees that it will petition any relevant court for prompt
action to accept or reject this Agreement, and to authorize the scheduled
payments in full.
25. THIRD PARTY BENEFICIARIES / INDEPENDENT CONTRACTOR
Nothing herein contained shall be deemed or construed by either party
hereto or by any third party to create any rights, obligations, or interests in
any third party, or to create any association, partnership, joint venture, the
relation of principal and agent, the relation of employer and employee, or any
fiduciary relationship of any kind between the parties hereto, it being
understood that SKYNET shall perform all services hereunder as an independent
contractor.
26. PUBLICITY AND ADVERTISING
26.1 Except as provided in Section 26.2 below, CUSTOMER shall not in any
way or in any form publicize or advertise in any manner the fact that
it is obtaining services from SKYNET pursuant to this Agreement,
without the express written approval (which shall not be unreasonably
withheld) of SKYNET, obtained in advance, for each item of such
advertising or publicity. The foregoing prohibition shall include but
not be limited to news releases, letters, correspondence, literature,
promotional materials or displays of any nature or form. Each request
for approval hereunder shall be submitted in writing to the
representative designated in writing by SKYNET; and approval, in each
instance, shall be effective only if in writing and signed by said
representative.
26.2 Notwithstanding the prohibitions contained in Section 26.1 above,
CUSTOMER may refer to the fact that it is securing services from
SKYNET without SKYNET's prior approval so long as such statements are
limited to a statement of such fact and are not an endorsement of any
product or service by SKYNET. Further, the Parties acknowledge that
CUSTOMER's wholly owned subsidiary, NetSat Express, Inc., has
previously requested and received approval(s) for certain publicity
and/or advertisements and SKYNET hereby extends such approval(s) to
CUSTOMER.
26.3 SKYNET shall not in any way or in any form publicize or advertise in
any manner the fact that it is providing services to CUSTOMER pursuant
to this Agreement, without the express written approval (which shall
not be unreasonably withheld) of CUSTOMER, obtained in advance, for
each item of advertising or publicity. The foregoing prohibition shall
include but not be limited to news releases, letters, correspondence,
literature, promotional materials or displays of any nature or form.
Each request for approval hereunder shall be submitted in writing to
the representative designated in writing by CUSTOMER; and approval, in
each instance, shall be effective only if in writing and signed by
said representative. Nothing herein shall prevent SKYNET from
providing the FCC or any other governmental agency, information
concerning this Agreement as required by Law or in response to a
request for information by such Governmental Agency. Notwithstanding
the foregoing, SKYNET may refer to
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 10 of 12
the fact that it is providing the Service to CUSTOMER without
CUSTOMER's prior approval so long as such statements are limited to a
statement of such fact and are not an endorsement of any product or
service by CUSTOMER.
26.4 Nothing in this Agreement shall prevent either Party from making such
disclosures and statements relating to the other Party as may be
reasonably required to comply with laws or regulations of the
Securities and Exchange Commission ("SEC") or any similar laws and
regulations requiring disclosure, provided that such disclosure is
limited to that required to comply with such laws and regulations.
Each filing Party agrees to take all reasonable, necessary steps to
exclude the pricing and payment terms (the "Price Information") of
this Agreement in such filing, to request confidential treatment of
the Price Information under the Freedom of Information Act and the
applicable rules of the SEC and to seek such other protections of the
Price Information that may be available.
27. CONFIDENTIALITY
This Agreement shall be kept strictly confidential, except for
disclosure (1) to the extent required by the law or legal process, in which case
the parties shall seek confidential treatment of the document and the
information contained herein, (2) as a part of normal accounting and auditing
procedures, (3) to each party's parent company, (4) to a bona fide potential
purchaser of the applicable business, investment bankers and bona fide potential
or actual lenders, or (5) to a governmental or regulatory agency requiring such
Information, provided any such party shall have agreed to keep this Agreement
confidential pursuant to an agreement containing terms substantially similar to
those in Section 28 ("NONDISCLOSURE OF INFORMATION") hereof.
28. NONDISCLOSURE OF INFORMATION
28.1 Each Party to this Agreement may find it beneficial to disclose to the
other Party documentation or other information which the disclosing
Party considers proprietary ("Information"). Such Information may
include but is not limited to, engineering, hardware, software or
other technical information concerning the SKYNET network or
CUSTOMER's network, and financial, accounting or marketing reports,
analysis, forecasts, predictions or projections relating to the
business of SKYNET or CUSTOMER generally.
28.2 It is specifically understood and agreed that Information disclosed
pursuant to this Agreement shall be considered proprietary either
because 1) it has been developed internally by the disclosing Party,
or because 2) it has been received by the disclosing Party subject to
a continuing obligation to maintain the confidentiality of the
Information.
28.3 Information that is provided in a tangible form shall be marked in a
manner to indicate that it is considered proprietary or otherwise
subject to limited distributions provided herein. If the Information
is provided orally or visually, the disclosing party shall clearly
identify it as being proprietary at the time of disclosure, and within
ten (10) working days of such disclosure, confirm the disclosure in
writing to the other party. With respect to Information, the Party to
whom the Information is disclosed and its employees and
representatives shall:
a. hold the Information in confidence and protect it in accordance
with the security regulations by which it protects its own
proprietary or confidential information, which it does not wish to
disclose, but in any event with not less than reasonable care;
b. restrict disclosure of the Information solely to those employees
and representatives with a need to know and not disclose it to any
other persons;
c. advise those employees and representatives of their obligations
with respect to the Information; and
d. use the Information only in connection with implementing this
Agreement and in continuing discussions and negotiations between
the parties concerning the Service, except as may otherwise be
agreed upon in writing.
e. As used herein, "representatives" means directors, officers,
subcontractors, consultants, and agents of a Party to this
Agreement.
28.4 The party to whom Information is disclosed shall have no obligations
to preserve the proprietary nature of any Information that:
a. was previously known to it free of any obligations to keep it
confidential;
b. is disclosed to third parties by the disclosing party without
restriction;
c. is or becomes publicly available by other than unauthorized
disclosure; or
d. is independently developed by the receiving party.
28.5 The receiving party may disclose the Information pursuant to a court
order or other governmental or regulatory compulsion provided that the
disclosing party shall be given prompt notice of the receipt of
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 11 of 12
such order or other compulsion.
28.6 The receiving party agrees that all of its obligations undertaken
under this non-disclosure agreement shall survive and continue for
three (3) years after termination of this Agreement.
The Information shall be deemed the property of the disclosing party
and, upon request the other party will return all Information that is in
tangible form to the disclosing party or destroy all such information.
29. WAIVERS
A waiver by either party of any of the terms and conditions of this
Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any subsequent breach thereof.
30. GOVERNING LAW
This Agreement shall be governed by and construed under the laws of
the State of New York, USA, without giving effect to its conflict of law
principles.
31. EXECUTION
To facilitate execution, this Agreement may be executed in two
identical counterparts; and the signature of each party shall appear on each
counterpart. Either counterpart shall constitute an original, binding version of
this Agreement. Facsimile signatures shall have the same legal effect as
original signatures and this Agreement shall be binding upon the receipt of
facsimile signature of each of the Parties.
32. SUCCESSION
This Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties hereto.
33. CUSTOMER COMPLIANCE
Customer shall comply with any restrictions or conditions imposed by
applicable government authorities on (i) Customer's receipt or use of the
Service in any country in which Customer uses the Service, and (ii) Customer's
use of the Service between or among any countries. Customer shall not use the
Service in violation of any applicable law, rule or regulation. Further,
Customer will obtain all necessary authorization and/or permits for the ground
segment equipment, and shall strictly comply with the provisions set forth in
the attached Satellite Access Procedures (Exhibit B). CUSTOMER's failure to
comply with the provisions of this Section 33 shall not constitute a force
majeure condition.
34. HEADINGS
The headings used throughout this Agreement are for convenience only
and are not a part of this Agreement and shall have no effect upon the
construction and interpretation of this Agreement.
35. EXPORT CONTROL
CUSTOMER will not use, distribute, transfer or transmit any products,
software or technical information (even if incorporated into other products)
provided under this Agreement except in compliance with U.S. export laws and
regulations (the "Export Laws"). CUSTOMER will not, directly or indirectly,
export or re-export the following items to any country which is in the then
current list of prohibited countries specified in the applicable Export Laws:(a)
software or technical data disclosed or provided to CUSTOMER by SKYNET or
SKYNET's subsidiaries or affiliates; or (b) the direct product of such software
or technical data. CUSTOMER agrees to promptly inform SKYNET in writing of any
written authorization issued by the U.S. Department of State office of export
licensing to export or re-export any such items referenced in (a) or (b).
CUSTOMER also will not, without the prior written consent of SKYNET, export or
re-export, directly or indirectly, any technical data or software furnished
hereunder from the country in which SKYNET first provided the technical data or
software to CUSTOMER hereunder, except to the United States. The obligations
stated above in this clause will survive the expiration, cancellation or
termination of this Agreement or any other related agreement.
36. ADDITIONAL ACTIONS AND DOCUMENTS
SKYNET and CUSTOMER each agree to take all necessary actions to
execute, deliver and file any additional documents and instruments, and to use
best efforts to obtain necessary or appropriate consents and/or approvals in
order to effectuate the provision of the Service in accordance with the terms
and conditions of this Agreement.
LORAL SKYNET PROPRIETARY
General Terms and Conditions
Globecomm Systems Inc. / Telstar 6 & 12
13-Nov-02
Page 12 of 12
37. RETIREMENT OF SATELLITE
37.1 SKYNET shall be entitled to retire the Serving Satellite without
liability: (i) if fifty percent (50%) or more of the transponders on
the satellite have failed or are unusable for any reason; (ii) in the
event that the satellite's station-keeping fuel, required to meet +
0.05 degrees, becomes depleted to a level sufficient only to ensure
removal of the Serving Satellite from its assigned orbital position;
(iii) if required to do so by any governmental authority with
appropriate jurisdiction; or (iv) if SKYNET reasonably determines that
(ii) above can be delayed by moving such Serving Satellite into an
inclined orbit; or (v) if special circumstances require retirement,
and such appropriate governmental authority as is required for
retirement is obtained.
37.2 SKYNET will use all reasonable efforts to provide CUSTOMER written
notice of a decision to retire the Serving Satellite prior to the
expiration of this Agreement as far in advance of the date of
retirement as circumstances allow. Upon retirement of the Serving
Satellite, all subsequent performance obligations of the parties under
this Agreement shall terminate.
38. CUSTOMER RESPONSIBILITIES
38.1 Unless otherwise specified in this Agreement, no terrestrial
facilities shall be provided by SKYNET, and CUSTOMER shall be
responsible to install, license and maintain the terrestrial
facilities, which communicate to and from the Serving Satellite.
CUSTOMER warrants to SKYNET that all required licenses/approvals have
been or will be obtained to operate such facilities, if any, prior to
the start date of the Service. CUSTOMER shall indemnify SKYNET and its
affiliates for any liabilities that SKYNET or any of its affiliates
may incur as a result of CUSTOMER'S failure to obtain such
licenses/approvals. CUSTOMER will not transmit or otherwise act in any
manner that violates the technical requirements of the Satellite
Access Procedures. CUSTOMER shall always provide the necessary
capability at its transmit facilities to cease transmission
immediately upon notice from SKYNET communicated via phone and/or
facsimile. SKYNET may, but is not obligated to, inspect
CUSTOMER-provided facilities to insure compliance with this
requirement.
38.2 CUSTOMER shall provide to SKYNET all pertinent technical
characteristics of CUSTOMER-provided equipment used in connection with
the Service as specified in Exhibit B ("SATELLITE ACCESS PROCEDURES").
39. ARBITRATION
All disputes arising in connection with the present Agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the United
Nations Commission of International Trade Law (UNCITRAL Rules) by one or more
arbitrators appointed in accordance with said Rules; where said rules require
the appointment of an arbitrator by an independent organization, the Parties
agree that such arbitrator shall be appointed by the American Arbitration
Association. The arbitration shall take place in New York City, New York, USA,
and shall be conducted in English. The arbitrator shall apply the substantive
(not the conflicts) law of New York. The award shall be in United States
dollars. Judgment upon the award rendered in the arbitration may be entered in
any court having jurisdiction thereof. Each Party shall bear its own expenses
(including attorney's fees) and an equal share of the expenses of the arbitrator
and the fees of the arbitration. Nothing in this Agreement shall be construed to
preclude any party from seeking injunctive relief in order to protect its rights
pending mediation or arbitration. A request by a party to a court for such
injunctive relief shall not be deemed a waiver of the obligation to arbitrate.
LORAL SKYNET PROPRIETARY
ATTACHMENT 3 - [***] AGREEMENT
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
This Agreement ("Agreement") is made on 10-May-2001, by and between NetSat
Express, Inc. ("NSX") 45 Oser Ave, Hauppauge NY 11788 and [***] ("Buyer") for
Satellite Services.
1. APPLICABLE TERMS AND CONDITIONS
-------------------------------
This Agreement represents the general provisions that apply to all
Satellite Capacity Services provided by NSX pursuant to Satellite Capacity
Order Form(s) issued by Buyer and accepted by NSX, as indicated by NSX
signature thereon. The Order Form defines the bandwidth amount, satellite,
monthly recurring charges, activation fee, start date for services and
duration of services. Each Order Form will reference this Agreement Number
(as shown in the footer of each page hereof). Upon execution by both
parties, the Order Form is incorporated herein by reference and made a part
hereof. This Agreement is intended to accommodate multiple Order Forms;
additional Order Forms will be incorporated herein upon acceptance by NSX.
The terms and conditions in this Agreement supercede any conflicting terms
and conditions in any Order Form. Nothing in this Agreement requires NSX to
accept any Order Form submitted by Buyer and Buyer acknowledges that all
Order Form(s) for Services are submitted subject to NSX acceptance, as
indicated by NSX signature on the Order Form(s).
2. SERVICES PROVIDED
-----------------
NSX shall (i) provide Satellite Capacity on the satellite and in the
bandwidth amount listed on the Order Form(s); (ii) assist Buyer with link
budgets, load plans, and other similar requirements to describe Buyer's
intended use of the satellite; and (iii) provide engineering and technical
support for outage reporting. Unless otherwise stated in the Order Form(s),
Buyer shall be responsible for all terrestrial services to transmit to and
receive from the satellite. Unless otherwise provided, "Services" shall
mean the services described in this Article 2.
3. RIGHT OF FIRST REFUSAL
----------------------
Upon execution by both parties of an Order for 27 MHz of bandwidth on
satellite Telstar 12, transponder 10, Buyer shall have a right of first
refusal on any additional satellite capacity for the same satellite and
transponder until 1-Aug-01. The right of first refusal shall mean that
prior to accepting any Order(s) for satellite capacity on satellite Telstar
12, transponder 10, NSX shall notify Buyer of the amount of available
capacity and Buyer shall have until 1-Aug-01 to submit a signed Order Form
for such capacity or notify NSX that it does not wish to purchase the
capacity. Upon receipt of notice that Buyer does not wish to purchase the
capacity, or if no notice or Order Form is received by 1-Aug-01, Buyer
shall have no further rights and NSX may sell the capacity to other
customers. Should Buyer submit an Order Form for such capacity prior to
1-Aug-01, NSX shall accept the Order from Buyer, subject only to agreement
on price, which price shall be negotiated in good faith between NSX and
Buyer, and NSX use of the satellite capacity for internal use. Internal use
shall include use necessary to satisfy contracts executed prior to the date
of notification to Buyer that the capacity was available. NSX and Buyer
acknowledge that as of the effective date of this Agreement, no additional
satellite capacity, above the 27 MHz to be ordered by Buyer, is available
on satellite Telstar 12 transponder 10. This right of first refusal shall
expire on 1-Aug-01 and thereafter NSX shall have no obligation to notify
Buyer of the satellite capacity availability.
4. USE RESTRICTIONS
----------------
Buyer shall comply with the NetSat Acceptable Use Policy provided as
Exhibit B, as may be changed from time to time; Operational Requirements,
Technical Appendix, and any and all attachments to this Agreement or the
Order Form(s); the Terms and Conditions from the Satellite Service Provider
provided as Exhibit A (if applicable); and all applicable governmental
laws, rules and regulations, including any export laws of the United States
or restrictions on Buyer receipt of Service applicable in any country in
which Buyer uses the Service. The Service shall be used by Buyer solely for
transmission of its own multi-carrier digital telecommunications services,
including the provision of value-added communications services by Buyer to
its end customers, provided that Buyer is responsible for all facilities
communicating with the Satellite and for coordinating the use of the
Service with NSX. Buyer acknowledges that certain of the use restrictions
relate to content transmitted over the satellite capacity and that NSX and
the Satellite Services Provider shall not monitor such content for
compliance but shall, upon report of improper use from any source, whether
private or public, take action to suspend or terminate Buyer's use of the
satellite capacity. In such event, Buyer will be notified of the nature of
the alleged improper use. In the event the Satellite Service Provider
terminates its services to NSX as a result of such reported improper use,
NSX shall have the right to terminate services hereunder with no further
obligation to Buyer.
5. ALLOWANCE FOR SERVICE INTERRUPTIONS
-----------------------------------
a) Buyer shall be entitled to service interruption credit upon proper
and timely notification to NSX and acceptance by the Satellite
Service Provider. The credit provided shall be applied
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Page 1 of 5
_____ Date: 8-May-01
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
against future payments. Interruptions begin when the problem is
reported to the Satellite Service Provider and the Buyer releases the
affected satellite capacity to the Satellite Service Provider for
testing and repair. An Interruption ends when the satellite capacity
is operative. The credit shall be calculated as a pro-rata portion of
the monthly recurring fee, based on a 30-day month, for the period of
the Interruption. Unless otherwise provided in the Order Form(s),
credits are given for each incidence of interruption of more than
thirty (30) minutes and are given in one-minute increments. Credits
will not be given for interruptions that are a result of:
i) the action or failure to act of Buyer or others authorized
by Buyer to use the affected satellite capacity;
ii) the effects of sun transit on receiving earth stations; or
iii) a Force Majeure condition.
b) NSX shall have the right to charge Buyer for work
carried out by NSX or the Satellite Service Provider to
locate, rectify and/or repair any fault(s)
i) not directly caused by any Satellite Service Provider's
service, channel or equipment;
ii) resulting from Buyer's willful act, fault, or negligence; or
iii) resulting from Buyer's failure to comply with its
obligations hereunder.
6. PAYMENT AND INVOICING
---------------------
A sum equal to the first month's Monthly Recurring Charge, activation
fee, and security deposit as noted on the Order Form, must be paid via
wire transfer within ten (10) days of the execution of the Order Form.
Payments by direct wire transfers shall be made to the NSX bank
account designated on the invoice. All payments by Buyer to NSX
hereunder shall be made in U.S. dollars. At Buyer's option, Buyer may
secure the deposit by irrevocable letter of credit in a form and
issued by a bank acceptable to NSX. All Monthly Recurring Charges are
due and payable monthly in advance. All bank fees shall be for the
account of Buyer. Monthly Recurring Charges shall commence on the
Start Date defined on the Order Form for the period between the Start
Date and the end of that calendar month. Thereafter, Monthly Recurring
Charges shall be due on the first day of each calendar month. If any
payment or portion thereof is not received by the due date, NSX shall
have the right to draw down on the deposit for the period in arrears.
BUYER shall within five (5) days of such draw down, replenish the
deposit or letter of credit to the full original amount. In the event
the deposit or letter of credit is not replenished, or Buyer's account
is otherwise not current in accordance with the terms of this
Agreement, NSX may terminate service in accordance with Article 9.
Payment shall be deemed made only upon receipt by NSX of collected
funds via bank wire transfer to an NSX designated bank account.
5. LATE PAYMENT
------------
Any late payment that is not received on the due date shall bear
interest at the lower rate of 1 1/2% per month or the highest rate
allowed by law, calculated from the date payment was due until the
date it is actually received.
7. TAXES AND OTHER CHARGES
-----------------------
Buyer is solely responsible for any taxes which may be assessed by any
local, state, national, public or quasi-public governmental entity as
a result of the Service provided to Buyer and/or Buyer's use of the
Service. Any use, excise, sales or privilege taxes, duties,
value-added taxes, fees, royalties, assessments (including government
and/or signatory "mark-up" on space segment) or similar liabilities,
however denominated, which may now or hereafter be levied on the
Satellite Services provided or payments made under this Agreement,
chargeable to or against NSX by any applicable government authority,
shall be passed through to, and be payable by Buyer in addition to any
other charges set forth in this Agreement.
8. EARLY TERMINATION BY BUYER
--------------------------
a) In the event Buyer terminates an Order prior to the end of the
term stated thereon, Buyer shall notify NSX in writing of such
termination; stop using the Services as of the effective date of
termination; and immediately pay NSX as liquidated damages for
default, and not as a penalty, [***].
In addition to the liquidated damages, Buyer shall pay
immediately upon termination all other fees and payments that
accrued prior to the date of termination; all costs and expenses
of collection, including reasonable attorney fees; and any costs
incurred by NSX to remove, jam, block, or otherwise cause Buyer
to stop using the Service.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
b) Buyer may terminate this Agreement for cause if NSX fails to
comply in any material respect with the covenants, agreements or
conditions herein, which are not corrected for thirty (30) days
after receipt of written notice from Buyer specifying the alleged
failure. In the event Buyer terminates this Agreement as a result
of NSX failure to
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Page 2 of 5
_____ Date: 8-May-01
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
comply, no further payments shall be due except for payments for
goods or Services provided prior to and including the termination
date.
9. TERMINATION BY NSX
------------------
NSX reserves the right to suspend or terminate Services to Buyer for
failure to comply in any material respect with the covenants or
conditions herein ("Buyer default"), or in the event of a filing of
bankruptcy, insolvency, appointment of a receiver, trustee, or other
assignment for the benefit of creditors by or against Buyer. Upon
notification of such termination, Buyer shall immediately cease
utilizing the space segment. NSX may if required, effect such
suspension or termination by jamming or otherwise interfering with
Buyer's signal or use of the satellite capacity. Upon termination by
NSX for Buyer default, Buyer shall immediately pay NSX as liquidated
damages for default, and not as a penalty, [***]. In addition to the
liquidated damages, Buyer shall pay immediately upon termination for
any reason all other fees and payments that accrued prior to the date
of termination; all costs and expenses of collection, including
reasonable attorney fees; and any costs incurred by NSX to remove,
jam, block, or otherwise cause Buyer to stop using the Service.
10. SATELLITE RETIREMENT
--------------------
Notwithstanding anything to the contrary in this Agreement, Buyer
acknowledges and agrees that NSX is providing a Satellite Link, which
has been previously procured from a Satellite Service Provider by NSX.
In the event the Satellite Service Provider ceases to operate the
satellite for any reason other than a willful breach by NSX of the
NSX-Satellite Service Provider Agreement, NSX shall have the right to
immediately terminate this Agreement and all Order Form(s) issued
hereunder related to that satellite. Thereafter, Buyer and NSX shall
have no further obligation, save for Buyer's obligation to pay for
services provided up to and including the date of termination.
11. BUYER COVENANTS
---------------
Buyer will not alter, tamper with, adjust or repair the Satellite
Services. Buyer shall not permit nor assist or permit others to abuse
or fraudulently use Satellite Services in violation of any United
States or local laws, regulations, or governmental orders. Buyer shall
pay all NSX invoices on receipt or as otherwise stated on the invoice.
12. WARRANTY
--------
a) NSX warrants that it will provide the satellite capacity and
other services set forth in Article 2 hereof and the applicable
Order Form(s) in accordance with generally accepted industry
standards and in accordance with the technical parameters,
satellite access procedures, and other requirements contained in
the Satellite Service Provider terms attached hereto as Exhibit
A. NSX's sole obligation and liability and Buyer's exclusive
remedy under this warranty is limited to the Allowance for
Service Interruptions provided in Article 5 hereof. Buyer's
remedy is subject to the notification and other provisions of
Article 5.
b) THE FORGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. BUYER
WAIVES, RELEASES, AND RENOUNCES ALL OTHER RIGHTS, CLAIMS, AND
REMEDIES, INCLUDING WITHOUT LIMITATION THOSE WITH RESPECT TO LOSS
OF USE OR OTHER SECONDARY OR CONSEQUENTIAL DAMAGES, HOWEVER
OCCASIONED, AND WHETHER OR NOT GROWING OUT OF OR BASED UPON NSX'S
NEGLIGENCE, ACTUAL OR IMPUTED.
13. LIMITATION ON LIABILITY
-----------------------
a) NSX shall not be liable for claims or damages caused by Buyer's
fault, negligence, or Buyer's failure to perform any obligation
hereunder, including obligations contained in the Satellite
Service Provider terms provided at Exhibit A; claims against
Buyer by any third party; any act or omission of any other party
furnishing products or services; and the installation or removal
of equipment furnished by any service provider, including NSX,
except where caused by the gross negligence of NSX.
b) NSX shall not be liable for unauthorized access to or alteration,
theft or destruction of data, programs, procedures or information
transmitted or received by Buyer caused by accident, fraudulent
means or devices, or any other method.
c) NSX will not be liable under any circumstances for any lost
profits or other consequential damages, even if NSX has been
advised of the possibility of such damages.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
d) IN NO EVENT WILL NSX LIABILITY IN CONTRACT OR IN TORT EXCEED THE
LESSER OF THE ACTUAL MONTHLY
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Page 3 of 5
_____ Date: 8-May-01
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
RECURRING CHARGES AND ACTIVATION FEES PAID BY BUYER TO NSX UNDER
THIS AGREEMENT OR THE MONTHLY RECURRING CHARGES TIMES SIX MONTHS
PLUS THE ACTIVATION FEES, BUT IN NO EVENT GREATER THAN THE ACTUAL
DAMAGES PROVEN BY BUYER AS DIRECTLY ATTRIBUTABLE TO NSX.
14. INDEMNIFICATION
---------------
Buyer shall defend and indemnify NSX, including any of its parent,
subsidiaries, or affiliated companies; the Satellite Service Provider;
and the Satellite Owner from any claims, liabilities, losses, costs,
or damages, including attorney fees and costs, arising out of:
a) Buyer's use of the Service and/or the content of material
transmitted thereon, including any actual or alleged libel,
slander, obscenity, indecency, infringement of copyright, or
breach in the privacy or security of transmissions;
b) Buyer's breach of its obligations under this Agreement, including
the terms of the Satellite Service Provider as provided in
Exhibit A;
c) Disputes between or among Buyer and its end customers,
transmission recipients, or its program, data or other
transmission content suppliers; and
d) Any warranty, representation or statement Buyer may make to a
third party in connection with the transmissions over the
Satellite.
15. ASSIGNMENT
----------
Buyer may not assign this Agreement without the prior written consent
of NSX, which consent shall not be unreasonably withheld. NSX may
assign all or part of its right, title or interest in this Agreement
and any or all sums due or to become due pursuant to this Agreement
for any reason. Upon receipt of written notice of a permitted
assignment hereunder, each party shall perform all its obligations
hereunder to or for the benefit of the assignee and execute and
deliver such documentation as may be reasonably required under this
Agreement.
16. NO RESALE
---------
The service is provided for Buyer's own use and in no event shall
Buyer be permitted to resell the Service in whole or in part to any
other person or entity except as expressly provided as part of value
added communication services to Buyer's end customers, in
circumstances where Buyer provides its end customers substantially
more communication facilities than "bare" space segment capacity.
17. NO PROPERTY INTEREST SUBORDINATION
----------------------------------
This Agreement is a service contract and does not grant, and Buyer
shall not assert, any right, interest or lien in any property or
assets of NSX or the Satellite Service Provider including any
Satellite or related equipment that they may own.
18. CONFIDENTIALITY
---------------
NSX and Buyer shall hold in confidence the information contained in
and exchanged in connection with this Agreement. Neither party shall
release any information concerning any of the terms of this Agreement
or any Order issued hereunder without the express written consent of
the other party. Any press release or other public notice regarding
this Agreement or any Order issued hereunder must be approved in
writing by the non-disclosing party, which approval may include the
format, content, timing, and method of release of the information.
Notwithstanding the foregoing, disclosure, on a confidential basis, by
either party to its principals, auditors, attorneys, investors,
lenders, insurance agents, and proposed and actual successors in
interest is permitted, and NSX may include Buyer's name and a general
description of the nature of the Services provided in any general
listing of NSX customers.
19. FORCE MAJEURE
-------------
NSX shall not be liable for any failure of or delay in performance
hereunder arising out of or resulting from causes beyond its
reasonable control including but not limited to acts of God; fire;
flood; adverse weather conditions, meteorological or atmospheric
occurrences or disturbances (including, but not limited to, sun
outages, sun spots, and other solar activity); other natural events;
war, warlike operations, insurrections, or riots; acts of any
government including laws, regulations, or orders; and labor troubles
causing cessation, slowdown, or interruption of services, whether such
events or actions affected NSX directly, the Satellite Service
Provider, or any other NSX subcontractor or vendor.
20. ADDITIONAL PROVISIONS
---------------------
a) This Agreement may not be amended, altered or modified except in
writing, duly executed by both parties.
b) This Agreement, along with the incorporated Order Form(s),
references, attachments, exhibits and schedules, contains the
entire Agreement between the parties with respect to the subject
matter of this Agreement, and supersedes all prior oral or
written agreements, commitments, or understandings.
c) The waiver or failure to enforce any provision of this Agreement
shall not operate as a waiver of
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Page 4 of 5
_____ Date: 8-May-01
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
any future breach of such provision or any other provision.
d) If any paragraph or term of this Agreement shall be determined to
be unenforceable, illegal, or invalid, the remaining provisions
and terms shall remain in full force and effect.
e) This Agreement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, and
such counterparts shall together constitute but one and the same
Agreement.
f) All notices or other communications which may be or are required
to be given to NSX under this Agreement shall be in writing,
delivered to 45-19 Oser Avenue, Hauppauge, NY 11788 USA,
Attention: Manager of Contracts; email: contracts@netsatx.net,
fax +1-631-231-9223. All notices or other communications which
may be or are required to be given to Buyer under this Agreement
shall be in writing, delivered to the address, email, or fax
number listed in the Order Form.
g) In the event of a dispute or disagreement between the parties in
connection with the interpretation, compliance, validity or
enforceability of any provision of this Agreement, until a
decision is rendered the parties will continue to comply with
this Agreement including payment for services.
21. GOVERNING LAW
-------------
This Agreement shall be governed by and construed under the laws of
the State of New York, USA, without giving effect to its conflict of
law principles.
NETSAT EXPRESS, INC. BUYER: [***]
-----------------------------
SIGNATURE: /S/ Kenneth Miller SIGNATURE: [***]
----------------------------- -------------------------
PRINTED NAME: Kenneth Miller PRINTED NAME: [***]
-------------------------- ----------------------
TITLE: Chief Executive Officer TITLE: [***]
--------------------------------- -----------------------------
DATE: 5/10/2001 DATE: 5/10/2001
---------------------------------- ------------------------------
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Page 5 of 5
_____ Date: 8-May-01
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission
TERMS & CONDITIONS FOR NETSAT EXPRESS SATELLITE CAPACITY
EXHIBIT A - SATELLITE SERVICE PROVIDER TERMS
LORAL SKYNET TELSTAR SATELLITES
1) USE OF THE SERVICE
Buyer shall provide an initial loading plan ("Initial Loading Plan")
prior to the Order start date. If Buyer desires to transmit to any
transponder in any manner different ("Different Loading Plan") than
its Initial Loading Plan, then the following shall apply:
a) If the Different Loading Plan involves Digital Carriers, Buyer
shall provide the Different Loading Plan to NSX, no later than
twenty-one (21) days prior to the start date of such Different
Loading Plan, identifying its characteristics. In the event that
NSX or the Satellite Service Provider is required to perform any
maintenance or troubleshooting activity involving the affected
satellite capacity, Buyer must furnish the Different Loading Plan
on demand.
b) If the Different Loading Plan involves the addition of or changes
to an FM Television Carrier or any Other Type Of Carrier, Buyer
shall provide a written request to NSX, no less than ninety (90)
days prior to the desired start date of such Different Loading
Plan, identifying the characteristics, and the desired start date
of such Different Loading Plan. NSX shall coordinate such
proposed Different Loading Plan with the Satellite Service
Provider to determine if its use could reasonably be expected to
result in either intra-satellite or inter-satellite interference,
and, based on the results of such coordination, the Satellite
Service Provider shall either authorize or reject the use of such
proposed Different Loading Plan, and NSX shall forward such
authorization or rejection in writing to Buyer. Authorization
shall not be unreasonably withheld.
c) Notwithstanding anything in this Agreement to the contrary, Buyer
may obtain authorization for more than one Different Loading Plan
for any transponder provided hereunder, for any period of time,
during the term of this Agreement.
d) In the event Buyer uplinks to any transponder in any manner
different from that authorized ("Unauthorized Loading Plan")
pursuant to either its Initial Loading Plan or any other
authorized Different Loading Plan for the affected transponder,
whether analog or digital, NSX may, in its sole discretion,
require Buyer to discontinue the use of such Unauthorized Loading
Plan until such time as the Satellite Service Provider authorizes
the use of such uplink such that it becomes a Different Loading
Plan pursuant to the provisions of this Agreement.
2) SCRAMBLING
Prior to commencing use of the satellite capacity provided under this
Agreement, Buyer, at its expense, shall provide NSX with any unscrambling
devices that may be required for signal monitoring. Buyer shall not use, or
allow the use of, the satellite capacity provided hereunder for
distribution of program material of a sexual or adult-oriented nature to
television viewers unless the programming is scrambled such that television
viewers can receive the programming only through the use of an unscrambler
authorized by Buyer or Buyer's authorized agent.
3) NON-INTERFERENCE
Buyer's radio transmissions (and those of its uplinking agents) to the
satellite shall comply, in all material respects, with all governmental
(whether national, international, federal, state, municipal, or otherwise)
statutes, laws, rules, regulations, ordinances, codes, directives and
orders, of any such governmental agency, body, or court (collectively
"Laws") applicable to it regarding the operation of the satellite,
transponder, space segment, and any backup satellite, transponder or space
segments to which Buyer is given access pursuant to this Agreement. Buyer
shall not interfere with the use of any other satellite, transponder or
space segment or cause physical harm to the satellite, transponder or
transponder, any backup satellite, transponder or space segment to which
Buyer is given access pursuant to this Agreement, or any other satellite,
transponder or space segment. Further, Buyer will coordinate with (and will
require its uplinking agents to coordinate with) NSX and the Satellite
Service Provider, in accordance with procedures reasonably established by
NSX and the Satellite Service Provider, its transmissions to the satellite
so as to minimize adjacent transponder, space segment and adjacent
satellite interference. For purposes of this section, interference shall
also mean acts or omissions that cause a satellite to fail to meet its
circuit parameters. Without limiting the generality of the foregoing, Buyer
(and its uplinking agents) shall comply with all U.S. Federal
Communications Commission ("FCC") rules and regulations regarding use of
automatic transmitter identification systems (ATIS).
4) IMPROPER ILLUMINATION
The transmission parameters are as set forth in the "SATELLITE ACCESS
PROCEDURES" attached hereto and incorporated by reference. Improper
Illumination shall include transmissions that are other than as described
in Exhibit B, transmissions at an incorrect frequency, transmissions at
excessive power levels or any illumination which can cause harm or
interference to any transponder, space segment or to any satellite. In the
event improper illumination of any transponder and / or space segment
provided under this Agreement is detected by NSX or the Satellite Service
Provider, Buyer shall be notified and shall take immediate corrective
action to stop the improper illumination within five (5) minutes of
notification from NSX. A charge of eleven hundred ($1,100.00) dollars per
minute will apply for improper illumination that continues beyond the five
minute period after notification, or attempted notification if there is no
answer at the telephone number provided by Buyer. Furthermore, if immediate
corrective action is not taken by Buyer, NSX shall have the right to take
immediate action to protect its and the Satellite Service Provider's
services or interests, including but not limited to suspending or
terminating Buyer's use of the affected transponder and / or space segment.
Any such termination would be a termination due to breach of the Buyer,
entitling NSX to all appropriate remedies provided for in this Agreement.
- --------------------------------------------------------------------------------
NetSat Express, Inc. Confidential Information Agreement SCA-01-005
Initials:_____ Exhibit A
_____ Form Date: 20-Nov-00
[NETSAT EXPRESS GRAPHIC OMITTED]
NETSAT EXPRESS ACCEPTABLE USE POLICY
1) This Acceptable Use Policy ("Policy") specifies the actions prohibited by
NSX to users of the NSX network. NSX reserves the right to modify the
Policy at any time.
2) The NSX network may be used only for lawful purposes. Transmission,
distribution or storage of any material in violation of any applicable law
or regulation is prohibited. This includes, without limitation, material
protected by copyright, trademark, trade secret or other intellectual
property right used without proper authorization; material that is obscene,
defamatory, or constitutes an illegal threat or harassment; fraudulent or
other material amounting to illegal misrepresentation; fraudulent or other
illegal use of private material; or material that violates export control
laws.
3) Violations of system or network security are prohibited, and may result in
criminal and civil liability. NSX will investigate incidents involving such
violations and may involve and will cooperate with law enforcement if a
criminal violation is suspected. Examples of system or network security
violations include, without limitation, the following:
a) Unauthorized access to or use of data, systems or networks, including
any attempt to probe, scan or test the vulnerability of a system or
network or to breach security or authentication measures without
express authorization of the owner of the system or network.
b) Unauthorized monitoring of data or traffic on any network or system
without express authorization of the owner of the system or network
c) Interference with service to any user, host or network including,
without limitation, mail bombing, flooding, deliberate attempts to
overload a system and broadcast attacks.
d) Forging of any TCP-IP packet header or any part of the header
information in an email or a newsgroup posting.
e) Sending unsolicited mail messages, including, without limitation,
commercial advertising and informational announcements, is explicitly
prohibited. A user shall not use another site's mail server to relay
mail without the express permission of the site.
f) Posting the same or similar message to one or more newsgroups
(excessive cross-posting or multiple-posting, also known as "SPAM") is
explicitly prohibited.
4) Buyer is responsible for protection of its passwords. Buyer will not use or
permit anyone to use NSX service to guess or obtain passwords or to access
other systems or networks without authorization.
5) Buyer is prohibited from using Internet Relay Chat scripts or programs that
interfere with or deny service to other users on any server or host or from
employing any means or method to adversely affect other users. Buyer is
also prohibited from engaging in activities that have the effect of
harassing other users.
6) Buyer may not use any IP address which is not assigned by NSX.
7) INDIRECT OR ATTEMPTED VIOLATIONS OF THE POLICY, AND ACTUAL OR ATTEMPTED
VIOLATIONS BY A THIRD PARTY ON BEHALF OF BUYER OR BUYER'S END USER, SHALL
BE CONSIDERED VIOLATIONS OF THE POLICY BY BUYER.
8) Violations of the Acceptable Use Policy will result in immediate suspension
and/or termination of service by NSX. NSX reserves the right to reveal the
name and contact information of Buyer and any of Buyer's downstream users
to relevant authorities or parties involved in any criminal investigation
or civil litigation alleging violations of this policy.