Contruct of Sale, Services & Licensing

IMPSAT, S.A. OEM CONTRACT

E-5349 (9/88P)



THIS CONTRACT is made as of this __ day of __, 1988 by and between Hughes Network S ystems, Inc., 11717 Exploration Lane, Germantown, MD 20874, a Delaware Corporation ("Seller") and IMPSAT, S.A., Viamonte 1526 - 9 degrees Piso, 1055 - Buenos Aires, Argentina, an Argentinian Corporation ("Buyer"), for the sale of equipment and related se rvices and the licensing of related software for the purpose of establishing Buyer as an OEM supplier of Integrated Satellite Business Networks(TM) ("ISBNs(TM)").



In consideration of the mutual covenants contained herein, the parties agree as follows:



I. SCOPE



A. Initial Order



In accordance with the terms and conditions set forth herein, the Statement of Work attached hereto as Exhibit A ("SOW") and the Technical Specification attached hereto as Exhibit F (which thre e documents will govern in the order of precedence just recited), Seller will provide to Buyer the equipment, software, and services set forth in Section 2, Deliverables of Exhibit A hereto ("Initial Order").



B. Additional Purchases



Seller agrees to sell to Buyer and Buyer will have the right to purchase from Seller during the term of this Contract, additional equipment, software and services listed in Section 2. ISBN(TM) System Equipment Options, of Exhibit C ("Additional Purchase (s)"). Orders for Additional Purchases will refer to and be governed by the terms and conditions of this Contract, unless otherwise explicitly agreed in writing.



C. OEM Relationship



Buyer will add value to equipment purchased under this Contract and will resell them under its own label. Exhibit D includes the manufacturing license and technical assistance draft agreement.



II. TERM OF CONTRACT



Notwithstanding execution of this Contract, this Contract will not be Effect ive until Buyer receipt of EXIM bank financing and Seller receipt of a related letter of credit, INTELSAT authorizes operation of the proposed VSATs over the selected INTELSAT transponder, and Buyer pays Seller the five (5) percent initial



Notwithstanding execution of this Contract, this Contract will

not be Effective until Buyer pays Seller the five (5) percent

down payment as required by Exhibit C."



The term of this Contract will extend from the Effective Date for a period of 5 years, and will continue thereafter until terminated by either party by sixty (60) days prior written notice or as otherwise provided herein.



III. CONTRACT PRICES



A. Prices for the initial Order



Buyer will pay to Seller for the Initial Order the prices set forth in Section 1 of Exhibit C.











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IMPSAT, S.A. OEM CONTRACT

E-5349 (9/88P)





B. Prices For Additional Purchases



1) Buyer will pay to Seller, for Additional Purchases, the prices set forth in Exhibit C subject to adjustments as set forth in this Contract.



2) Prices for Additional Purchases will remain fixed until January 1, 1990. At any time thereafter during the term of this Contract. Seller may increase prices with ten (10) days prior notice to Buyer, not more than once each calendar quarter, at a rate not to exceed seven and one-half percent (7 1/2%) per year cumulative from the Effective Date.



3) Price increases provided for in Paragraph B.2 above will apply to orders placed after the effec tive date of the price increase and to portions of orders for which Buyer has requested delivery six (6) months or more after the effective date of such price increase.



C. Additional Charges



In addition to the prices set forth in E xhibit C for the Initial Order and for Additional Purchases. Buyer will pay to Seller any customs, duties or taxes imposed by a jurisdiction outside the United States. If Seller arranges shipping beyond U.S. port of embarkation, shipping costs for the Ini t ial Order or Additional Purchases, if any, incurred by Seller will be billed to Buyer at Seller's cost plus a ten percent (10%) handling charge, except that shipping charges for PES(TM) remote terminals will be as set forth in Exhibit C. Other charges whi ch Seller may be required to pay or collect upon with respect to the Initial Order or Additional Purchases or any part thereof, will be billed to Buyer at Seller's cost.



IV. PAYMENT TERMS



Buyer will make each payment under this Contract in a ccordance with the payment terms stated in Exhibit C. A late payment charge, at an annual rate of the lesser of (i) the current prime rate (or equivalent), as last quoted by The Wall Street Journal prior to the due date of the payment, plus two percent (2 %), or (ii) the maximum rate allowed by applicable law, will be applied to any payment not received by the due date thereof.



V. DELIVERY, TITLE AND RISK OF LOSS



A. Delivery



1) Delivery of Initial Order equipment shall be F.O.B. U.S. port of embarkation, cleared for export according to the scheduling requirements set forth in the SOW. Seller will arrange for shipment of Initial Order equipment to a location designated by Buyer in accordance with the provisions of Exhibit C.



2) Seller will deliver Additional Purchases equipment F.O.B. U.S. port of embarkation cleared for export on schedules to be mutually agreed upon. Seller will arrange for shipments of Additional Purchases equipment to a location designated by Buyer in accordance with the provisions of Exhibit C.



3) In the event that any equipment is ready for delivery in accordance with the delivery schedule and Seller delays shipments thereof pursuant to Buyer's request or because Buyer is no t prepared to accept such scheduled delivery. Seller will notify Buyer that such equipment is available for shipment, and will store











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IMPSAT, S.A. OEM CONTRACT

E-5349 (9/88P)





the equipment. Buyer will reimburse Seller for all reasonable and actual storage or other expenses that Seller incurs by reasons of such d elay and storage. If redelivery has not occurred within fifteen (15) days, (but sixty (60) days if Buyer needs the time to secure import clearance) Seller will invoice Buyer, and Buyer will pay Seller for the equipment.



B. Title and Risk of Loss



Risk of loss thereof or damage to all or a portion of the equipment will pass to Buyer at the time of shipment except that risk of loss or damage for equipment to be installed by Seller will pass to Buyer upon installation. Title to all or a portion of the equipment will pass to Buyer upon shipment.



VI. ACCEPTANCE



A. Acceptance



Buyer will accept the Initial Order and Additional Purchases or portions thereof, as of the date of successful competition of the applic able Acceptance Test described in the SOW. Promptly upon completion of the Acceptance Test. Buyer will give its Acceptance or will notify Seller in writing of the particulars in which the equipment or software does not conform with the requirements of Exh i bit F. Failure of Buyer to give such notice within ten (10) business days after conduct of the applicable Acceptance Test will constitute Acceptance by Buyer. Seller will promptly correct any nonconformities of which it has written notice from Buyer and w ill notify Buyer that the corrections are ready for retest and Acceptance. Upon successful completion of such retest, Buyer will give its Acceptance.



B. Qualified Acceptance



Qualified acceptance by Buyer ("Qualified Acceptance") wil l occur upon determination by Buyer, and written notification to Seller thereof, that equipment or software, although not yet accepted, is suitable for beneficial use. Buyer will have the right of free access to and use of any equipment of software with r e spect to which Qualified Acceptance has occurred. Qualified Acceptance will be deemed to constitute Acceptance for purposes of (i) the payment schedules set forth in Exhibit C and Buyer agrees to pay Seller in accordance with such schedule to the extent t h at Qualified Acceptance has occurred, (ii) passage of title under Section V(B) hereof, and (iii) start of warranty. However, Qualified Acceptance will not relieve Seller from any of its responsibilities under this Contract, including correction of deficie ncies.



C. Liquidated Damages



If HNS is late in completion of Qualified Acceptance for the Hub and initial PES(TM) units, then Buyer as its sole and exclusive remedy shall be paid by HNS the following liquidated damages:



- 0.1% per work day on the value of Hub equipment for

the first month of delay



- 1% per week at the start of second month of delay



- Total damages will not exceed 10% of the value of

the Hub equipment.



- In the event such total damages reach 10% of the

value of the Hub equipment, Buyer may, at its option,

terminate this Agreement on 30 days notice, and

opportunity to cure.



D. Premium Payments











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IMPSAT, S.A. OEM CONTRACT

E-5349 (9/88P)





If HNS completes Qualified Acceptance for the Hub and Initial PES(TM) units ahead of schedule, then Buyer will pay to HNS the following premiums:



- 0.05% per work day of the value of the Hub equipment for up to

one month advance completion



- 0.5% per week for more than one month advance completion



- Total premium will not exceed 5% of the value of the Hub



VII. LICENSE OF SOFTWARE



A. Buyer acknowledges that any software supplied by Seller to Buyer hereunder is subject to the proprietary rights of Seller and/or Seller's vendor(s) (the "Licensor(s)"). Seller or its Lic ensor(s), as the case may be, will retain title to all of the Software.



B. Subject to performance by Buyer of the terms and conditions of this Contract, Seller hereby grants to Buyer and Buyer hereby accepts from Seller a limited, nontransfe rable (except to Buyer's and user customers in Argentina) nonexclusive license for sublicense, as applicable) to use the Software solely in the operation of Seller equipment or equipment manufactured by or for Buyer under the Manufacturing License and Tec hnical assistance Agreement between the Parties entered into or even date herewith, to commence on delivery of the Software to Buyer and payment thereof by Buyer and to last for the life of the Seller equipment.



C. Except as permitted by this Paragraph, Buyer will not (i) copy or duplicate, or permit anyone else to copy or duplicate, any part of the Software, or (ii) create or attempt to create, or permit others to create or attempt to create, by reverse engineering or otherwise, the source p rograms or any part thereof from the object programs or from other information made available under this Contract. Buyer may at its own expense) make one copy of the Software (except for the source program) for archive purposes.



D. Buyer will not, directly or indirectly, sell, transfer, offer, disclose, lease (as lessor), or license the Software to any third party, except that subject to the terms of this Contract. Buyer may sublicense to a third party purchaser, leasee or user of the equipme nt the right solely to use the software in the operation of the equipment.



E. If Seller produces any new features or functional changes in the software after delivery of the software hereunder, which it makes generally available to its custom ers. Buyer shall have the right to obtain such new features or functional changes at the prices then in effect including Seller's standard purchase price and recurring maintenance charges. If Buyer elects to purchase the software containing such new featu res or functional changes, such software is also covered by this license.



VIII. LIMITED WARRANTIES, DISCLAIMERS, PROCEDURES



A. Seller will deliver good title to all or any part of the Initial Order or Additional Purchases that is to become the property of Buyer pursuant to this Contract, free from any and all liens, claims, or encumbrances.



B. Subject to the terms and conditions hereof, Seller warrants for a period of one year, commencing upon the date(s) of Buyer's Acceptance thereof ("Warranty Period"), modules or assembled units tested by Seller and provided to Buyer pursuant to this Contract against defects in material and workmanship that











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IMPSAT, S.A. OEM Contract

E-5349 (9/88P)





cause a failure to perform in accordance with the specifications set forth in this Contract ("Defects "). Seller shall, as its sole liability for breach of Warranty and at its option and expense in accordance with Paragraph D below, promptly repair or replace, or cause to be repaired or replace or cause to be repaired or replaced, any Seller equipment tha t proves to have a Defect during such Warranty Period.



C. Subject to the terms and conditions hereof, Seller warrants that the Software developed by Seller and provided Buyer pursuant to this Contract ("Seller's Software") will, when property installed on the equipment on which it is designated by Seller for use, perform in accordance with the specifications in this Contract. As its sole liability hereunder for Seller's Software, upon Acceptance. Seller will commence software maintenance in a ccordance with the Statement of Work, provided for in the ISBN(TM) System Maintenance Services Agreement between the parties.



D. The limited warranties set forth in this Article, except for the warranty of title, are contingent upon Buyer's n otifying Seller or an alleged Seller equipment defect during the warranty periods defined herein. Repair, replacement, amendment, or alteration will be performed in accordance with Seller's standard practices with respect to such equipment. Buyer shall be responsible for the return of equipment to Seller's designed repair location, freight prepaid and packed to assure safe arrival. Seller shall return repaired, replaced, amended or altered equipment, freight prepaid and packed to assure safe arrival to Bu yer's designated location in Argentina.



E. The limited warranties set forth in this Article will not apply with respect to (i) Seller equipment that has been subject to unauthorized alteration, modification, or repair, or (ii) defects or fail ures resulting from improper handling, storage, operation, interconnection, or installation; failure to continually provide a suitable installation and operational environmental or any other cause beyond the range of normal usage for the equipment (except , in all of the foregoing cases, when caused by Seller).



F. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER NEITHER MAKES, NOR ASSUMES ANY LIABILITY UNDER, ANY WARRANTIES (WHETHER EXPRESS, IMPLIED, OR STATUTORY) ON OR WITH RESPECT TO THE INIT IAL ORDER AND/OR ADDITIONAL PURCHASES OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Service of Seller equipment, in the manner and for the period of t i me provided above, and Seller's satisfaction of its obligations under the SOW will constitute fulfillment of all liabilities of Seller to Buyer, whether based on contract, negligence, or otherwise with respect to the equipment or the software delivered to Buyer hereunder.



G. Any software and any equipment designed with an asterisk is provided by Seller "as is," provided that Seller will make available to Buyer the benefits of any vendor or licensor original warranty. SELLER NEITHER MAKES NOR ASSUMES ANY LIABILITY UNDER ANY WARRANTIES (WHETHER EXPRESS, IMPLIED, OR STATUTORY) ON OR WITH RESPECT TO ANY SUCH EQUIPMENT OR SOFTWARE, INCLUDING ANY IMPLIED CONDITIONS OR WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.



IX. MAINTENANCE AND SPARE PARTS SUPPORT



Seller will make available spare parts and maintenance services for all equipment sold under this Contract for a period of not less than seven (7) years from the Effective Date. In the event Seller is unable to supp ly such spare parts because of bankruptcy or being otherwise out of business. Seller will provide Buyer











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IMPSAT, S.A. OEM Contract

E-5349 (9/88P)





with all necessary drawings and engineering detail as necessary to allow Buyer to maintain ISBN(TM) equipment.



The standard ISBN(TM) maintenance service agreement is included in Exhibit E and will be executed by IMPSAT, S.A. and HNS.



X. PROPRIETARY INFORMATION



A. Seller and Buyer, to the extent of their contractual and lawful right to do so, will exchange proprietary or confidential infor mation as reasonably necessary for each to perform its obligations under this Contract. All information relating to this Contract provided by either party to the other, whether oral or written, and when identified as confidential in writing, and all Softw are will be and is hereby deemed to be confidential and ("Proprietary Information").



B. Except as set forth in Paragraph C below, a party receiving Proprietary Information pursuant hereto (the "Receiving Party"), will not, without the prior w ritten consent of the party disclosing such information the "Disclosing Party"), (i) use any portion of the Proprietary information for any purpose other than the purpose of this Contract, or (ii) disclose any portion of the Proprietary information to any persons or entities other than the employees, manufacturing subcontractors, and consultants of the Receiving Party and Seller's subcontractors) who reasonably need to have access to the Proprietary information in connection with the purposes of this Contr act and who have agreed to protect Proprietary information as though they were a party to this Contract.



C. A Receiving Party will not be liable for disclosure of Proprietary information, or part thereof, if the Receiving Party can demonstrat e that such Proprietary information (i) is in the public domain at the time it is disclosed or subsequently entered the public domain through no fault of the Receiving Party; (ii) is known to or in the possession of the Receiving Party at the time of rece i pt; (iii) became known to the Receiving Party from a source other than the Disclosing Party without breach of this Section by the Receiving Party; or (iv) is disclosed more than five (5) years, except fifteen (15) years for Software, after the date of rec e ipt of the Proprietary Information by the Receiving Party. In the event of any legal action or proceeding or asserted legal requirement for disclosure of Proprietary Information furnished hereunder, the Receiving Party will promptly notify the Disclosing P arty and, upon the request and at the expense of the Disclosing Party, will cooperate with the Disclosing Party in lawfully contesting such disclosure. Except in connection with any failure to discharge its responsibilities under the preceding sentence, t he Receiving Party will not be liable for any disclosure pursuant to court order.



D. Proprietary information will remain the property of the Disclosing Party and will, at the Disclosing Party's request and after it is no longer needed for the purposes of this Contract, promptly be returned thereto or be destroyed, together with all copies made by the Receiving Party and by anyone to whom such Proprietary Information has been made available by the Receiving Party in accordance with the provisi ons of this Section.



XI. LIMITATION OF LIABILITY.



Seller will be liable for any direct and proximate damages that Buyer may suffer as a consequence of material breach by the Seller of its duties according to the Contract. Notwithstanding any other provision of this Contract, the remedies of Buyer set forth herein are exclusive and the liability of Seller with respect to











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the Initial Order or Additional Purchases, will not exceed return of monies paid for goods not accepted (in the case of the hub, after Syst em Acceptance Test) plus ten percent (10%) of the lesser of price of the Initial Order or Additional Purchases or part thereof on which such liability is based. IN NO EVENT WILL SELLER BE LIABLE TO BUYER OR ANYONE ELSE FOR SPECIAL, COLLATERAL, EXEMPLARY, I NDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF GOODWILL, LOSS OF PROFITS OR REVENUES, LOSS OF SAVINGS, LOSS OF USE, INTERRUPTIONS OF BUSINESS, AND CLAIMS OF CUSTOMERS) WHETHER SUCH DAMAGES OCCUR PRIOR TO SUBSEQUENT TO, OR ARE ALLEGED AS A RESULT OF, TORTIOUS CONDUCT OR BREACH OF ANY OF THE PROVISIONS OF THIS CONTRACT, EVEN IF SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.



XII. PATENT AND COPYRIGHT INDEMNITY



A. Seller agrees to resist or d efend at its own expense any request for royalty payments or any claim for equitable relief or damages against Buyer based on an allegation that the manufacture of any Seller equipment or the use, lease, or sale thereof or that any documentation infringes any United States or Argentinian patent or copyright, and to pay any royalties and other costs related to the settlement of such request and to pay the costs and damages, including attorney's fees, finally awarded as the result of any suit based on such c l aim, provided that Seller is given prompt written notice of such request or claim by Buyer and given authority and such reasonable assistance and information as Seller requests in writing and as it is available to Buyer for resisting such request or for t he defense of such claim.



B. In the event that, as a result of any such suit (i) prior to delivery, the manufacture of any item supplied by Seller hereunder is enjoined, or if after delivery, the use, lease or sale thereof is enjoined. Seller will, at its option and expense, either (a) negotiate a license or other agreement with plaintiff so that such item is no longer infringing, (b) modify such item suitably or substitute a suitable item therefore, which modified or substituted item is not s ubject to such injunction, and to extend the provisions of this Article thereto, or, if (a) or (b) cannot be effected by Seller's reasonable and diligent efforts, (c) repurchase enjoined items at their then current value on Buyer's books, and (d) compensa te Buyer for the direct and proximate damages suffered by it as a consequence of that injunction.



C. Notwithstanding the above, Seller will not be liable for any damages or costs resulting from claims (i) that Seller's compliance with Buyer's designs, specifications, or instructions, (ii) that use of any item provided by Seller in combination with products not supplied by Seller, or (iii) that a manufacturing or other process carried out by or through Buyer and utilizing any item provided by S eller constitutes either direct or contributory infringement of any United States patent (such claims being collectively referred to herein as "Other Claims"). Buyer will indemnify Seller from any and all damages and costs (including settlement costs) fin ally awarded or agreed upon for infringement of any United States patent or copyright in any suit resulting from Other Claims, and from reasonable expenses incurred by Seller in defense of such suit if Buyer does not undertake the defense thereof.



D. In no event will Seller or Buyer be liable for damages hereunder in excess of the contract price or for consequential damages or costs. This indemnity is in lieu of any other indemnity or warranty, express or implied, with respect to patents and copyrights.











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XIII. RESPONSIBILITIES OF BUYER



Buyer will, at is own expense, preform its responsibilities, in accordance within the requirements and schedule(s) set forth in the SOW.



XIV. FORCE MAJEURE



Seller will not be liable for nondelivery, d elay in delivery or installation, or any other impairment of performance hereunder in whole or in part caused by the occurrence of force majeure, including but not limited to war (whether an actual declaration thereof is made or not), sabotage, insurrecti o n, rebellion, riot or other act of civil disobedience, act of a public enemy, failure or delay in transportation, failure of or delay in performance of Buyer's obligations under this Contract, act of any government or any agency or subdivision thereof, ju d icial action, labor dispute, fire, accident, explosion, epidemic, quarantine, restrictions, storm, flood, earthquake or other Act of God, or shortage of labor, fuel, raw material, or machinery, where Seller has exercised ordinary care in the prevention th ereof. If any such contingency occurs. Seller and Buyer will agree on a new schedule and the delivery requirements of this Contract will be amended accordingly.



XV. GENERAL



A. Export Control/Regulations ...