Full-Time Transponder Service Agreement

FULL-TIME TRANSPONDER SERVICE AGREEMENT

FOR DATA SERVICE DELIVERY (PRE-LAUNCH)



This Agreement (the "Agreement) is entered into this 18th day of August, 1994, by and between PanAmSat, L.P., a Delaware limited partnership ("PanAmSat") and Resis S.A. a corporation organized and existing under the laws of Argentina ("Customer"). This Agreement covers the provision of twenty-four hour fixed term non-preemptible satellite signal reception and retransmission service (the "Service") by PanAmSat to Customer. The Service shall be supplied by PanAmSat, in outerspace, from one (1) 54 MHz. C-Band transponder in the beam that is identified in Appendix A to this Agreement from the Second Atlantic Ocean Region Satellite (the "Satellite") now under construction by Hughes Aircraft Company for PanAmSat, as described in Appendix B. The transponders on the Satellite and the beams in which these tr ansponders are grouped are referred to as "Transponder(s)" and the "Beam(s)," respectively.





In consideration of the foregoing and of the mutual promises set forth below, PanAmSat and Customer mutually agree as follows:



ARTICLE 1 PROVISION OF SERVICE



1.1 The Service. PanAmSat agrees to provide, and Customer agrees to accept, Service meeting the "Service Specifications" set forth in Appendix C. PanAmSat shall not voluntarily preempt or interrupt the provision of Service to Cu stomer, except as may be required under Section 6.1. In no event shall these exceptions be construed so as to permit PanAmSat to preempt Service to Customer so as to allow PanAmSat to use the capacity formerly used to provide Service to Customer for anoth er customer. PanAmSat's provision of Service includes the construction, launch, operation, maintenance, telemetry, tracking and control ("TT&C") for the Satellite by PanAmSat or its contractors.



1.2 Beam and Transponder Designation. The Beam, and subject to Section 5.3, the particular Transponder upon which Customer shall be provided Service (the "Service Transponder") shall be identified in accordance with Appendices A and C.



1.3 Usage.



(a) Use of Service Transponder for Multi carrier Digital Service. The Service is designed for, and may be used by, Customer solely for transmission of its own multicarrier digital telecommunications services, which, for purposes of this Agreement includes the provision of value-added communicati o ns services which may incorporate closed circuit digital video and teleconferencing applications by Customer and/or its Affiliates (defined herein to mean an entity that controls, is controlled by or is controlled in common with Customer) to its customers ; provided that Customer is responsible for all facilities communicating with the Service Transponder and for coordinating the use of the Service Transponder with PanAmSat. In no event shall the Service be used for the transmission of full-time, part-time o r occasional "Commercial Television Service", defined herein as video programming, with associated audio signals, for broadcast, cable, direct to home or similar mass distribution. Customer may employ the Service for switched public international telecomm u nications services, subject to regulatory restrictions, if applicable, subject to PanAmSat's prior written consent, not to be unreasonably withheld, including (without limitation) with respect to the number of 64 kpbs bearer circuits that Customer shall b e permitted to employ from time to time, until and unless the restriction on the overall number of such circuits that can be provided from the Satellite is lifted. If Customer interconnects the Service, or any portion thereof, to the U.S. public switched n etwork at a U.S. common carrier's premises, Customer shall provide to PanAmSat such information as may be required by the Federal Communications Commission ("FCC") as a result of such interconnection.



(b) Third Party Use. If, after the Service Date: (i) Argentina, Colombia, Venezuela and/or Ecuador (each, a "Designated Country") have not associated themselves with an Intelsat Article XIV(d) Consultation for the Satellite (an "Association")





and (ii) a portion of the Service cannot be used as required in Section 1.3(a) above by Customer or any of its Affiliates in one or more of the Designated Countries solely as a result of the failure to obtain such Association(s) in the Designated Country( ies), then, upon notification by Customer to PanAmSat that a portion of the Service Transponder capacity provided to Customer (not to exceed 25% of the overall Service capacity for each Designated Country that has not made an Association) is available for the reasons set forth in clauses (i) and (ii) above, if PanAmSat has no other capacity available to it that could be used to provide comparable services (which PanAmSat may employ ahead of any unused Customer capacity), PanAmSat shall use all reasonable e f forts to market full-time services from such unused capacity to other customer(s) (an "Excess Capacity User(s)") for other purposes, subject to PanAmSat's reasonable discretion with regard to the terms and conditions of service and selection of appropriat e Excess Capacity Users, which shall be consistent with its general practices in this regard. In addition, subject to the considerations stated in the previous sentence, if Customer identifies to PanAmSat a potential Excess Capacity User who desires to pur c hase from PanAmSat full-time services that employs the unused portion of the capacity of a Service Transponder, PanAmSat shall seek, in good faith, promptly to enter into a service agreement with said Excess Capacity User at a service fee approved by Cust o mer, provided that, if Customer requests that PanAmSat enter into a service agreement with said potential Excess Capacity User for such unused capacity for the remainder of the Service Term, PanAmSat shall have a right of first refusal to relieve Customer of all obligations with respect to such capacity instead of entering into a service agreement with the potential Excess Capacity User identified by Customer, and provided further that, if PanAmSat was already in negotiations with said potential Excess Cap a city User for other PanAmSat capacity, PanAmSat shall not be required to discontinue such negotiations. If PanAmSat enters into any third party contract with an Excess Capacity User pursuant to this Section 1.3(b), and if requested by Customer, PanAmSat s hall include in such third party contract additional limitations to the extent requested by Customer regarding service term and conditions under which such third party service shall be preemptible for use by Customer or its Affiliates.















In the event PanAmSat enters into contract(s) with Excess Capacity User(s) as provided in this Section, Customer shall remain responsible directly to PanAmSat for compliance with all of its payment obligations under this Agreement, for compliance with all terms and conditions of this Agreement applicable to use of the Service by Customer or its Affiliates and for making available the unused capacity that Customer notified PanAmSat was available under this Section; provided that neither party shall be responsible to the other for any breach by an Excess Capacity User.



In the event that PanAmSat is successful in marketing Customer's unused capacity, PanAmSat shall credit against Customer's next monthly Service Fee (which shall continue to be payable hereund er) such amounts that are actually received from the Excess Capacity User for service from the unused capacity for the previous month (less costs reasonably incurred by PanAmSat for providing any related services and equipment, not provided to Customer, t h at are associated with the provision of such service and costs, including reasonable attorney's fees, reasonably incurred by PanAmSat in marketing such services to, or negotiating a service agreement with, third parties) up to the amount of the Service Fe e (calculated pro rata based upon the amount of capacity retained by Customer or marketed by PanAmSat), paid by Customer for the applicable period for the unused capacity made available by Customer to PanAmSat for remarketing under this Section 1.3.



If one of the Designated Countries subsequently completes an Association or if such Association ceases to be required, any excess capacity that has been made available by Customer to PanAmSat for marketing under this Section shall be returned to Custome r ; provided that any such capacity that is then under contract by PanAmSat to another third party as provided under this Section, subject to any rights of termination or preemption that may have been specified in that third party's contract, shall be retai ned for such purposes until such contract is concluded.



In no event shall Customer be permitted to market to third parties any of the capacity allocated to it under this Agreement, except as expressly provided herein.



1.4 Transmission Plan. Subject to PanAmSat's prior written approval of Customer's transmission plan, Customer shall be permitted to transmit any number of RF carriers to and from the Service Transponder that Customer wishes and, again subject to PanAmSat's approval, to modify t h is transmission plan from time to time. PanAmSat agrees to reply within thirty (30) days of receipt of, and shall not unreasonably withhold its approval of, a transmission plan or modification to such a plan, which approval shall be based solely upon the considerations identified in Section 4.1 below. PanAmSat makes no representation, warranty, or covenant regarding the efficacy of the use of any number of carriers or other alternative uses of capacity provided under this Agreement.



ARTICLE 2. TERM, SERVICE TERM.



2.1 Term. The term of this Agreement (the "Term") shall commence upon the first date above written and, unless previously terminated in accordance with Article 7, shall remain effective until the end of the "Service Term," as defined below.



2.2 Service Term. The Service Term shall start on the date that Customer receives a certification from PanAmSat that the Satellite has been placed in its assigned orbital position, with the Service Transponder capable of providing Service meeting th e Service Specifications (the "Service Date"). The Service Term shall continue until 23:59 Greenwich Mean Time on the fifteenth anniversary of the Service Date. The Service Date is currently anticipated to occur no later than April 30, 1995 (the "Latest A nticipated Service Commencement Date").



ARTICLE 3. CUSTOMER PAYMENTS.



3.1 Service Fee. For each month of the Service Term beginning on the Service Date, Customer agrees to pay the monthly "Service Fee" shown in Appendix A hereto. Customer shall deposit with PanAmSat the Service Fee for one month on or before the first date above written (the "Deposit"), and this Deposit shall be applied to the Service Fee for



- 5 - the last month of the Service Term. Customer shall make each and all other monthly payments of the Service Fee, in advance, no later than the first business day of each month of the Service Term.



3.2 Reserved.



3.3 Manner Of Payment. All payments by Customer shall be made in U.S. do llars; shall be deemed to be made only upon receipt by PanAmSat of collected funds; and shall be made by bank wire transfer to such bank account as PanAmSat may designate by notice to Customer, or by cashier's or certified check, from a U.S. bank, deliver ed to PanAmSat at its principal place of business, as designated in Section 14.5(b).



3.4 Late Payment. Any payment due from Customer to PanAmSat that is not received by PanAmSat within ten (10) days of the date that it is due shall be subject to a del inquency charge (liquidated damages) at the rate of [ ]* percent [ %]* per month on such overdue amount applied retroactively from the payment due date until it is actually received by PanAmSat. Customer acknowledges that such delinquency charge is re asonable under all the circumstances existing as of this date.





3.5 Taxes. Customer is solely responsible for any taxes, charges, levies, duties, usage or spectrum fees which may be asserted by any local, state, or national governmental entity as a result of the Service provided to Customer and/or Customer's use of said Service, with the exception of any taxes based on the net worth, capital, property, or income of PanAmSat, or any partner thereof.



ARTICLE 4. CUSTOMER'S OBLIGATIONS IN USING THE SERVICE.



4.1 Non-Interference and Use Restrictions. Customer's transmissions to and from the Satellite and its use of the Service shall comply with all applicable governmental laws, rules and regulations. Customer will follow established practices and procedures for





- ------------------ * CONFIDENTIAL TREATMENT REQUEST -- Confidential portion has been omitted and filed separately with the Commission.





frequency coordination and will not use the Service Transponder, or any portion thereof, in a mann er which would or could be expected to, under standard engineering practice, interfere with the use of any other Transponder, the Satellite, or any other satellite or transponder on such satellite, or cause physical harm to the Service Transponder, any ot h er Transponder, the Satellite, or any other in-orbit satellite or transponder on such satellite. Customer shall also comply with the operational requirements (the "Operational Requirements") set forth in Appendix D, as the same may be modified from time to time by PanAmSat, in its reasonable discretion.



4.2 No Terrestrial Facilities. Customer shall be responsible for the provision, installation, operation and maintenance of all earth station facilities and equipment ("Customer-Provided Facilities") , for transmitting signals to, or receiving signals from, the Satellite in accordance with the requirements set forth in this Agreement. Customer shall also be responsible for acquiring all authorizations necessary for installation and operation of Custo mer-Provided Facilities. Any provision by PanAmSat to Customer of earth station or other terrestrial facilities or services shall be the subject of a separate agreement.



4.3 Customer's Transmitting Stations. Customer will configure, equip and operate its transmit facilities so that the interface of these facilities, in space, with the Satellite shall conform to the characteristics and technical parameters of the Satellite. Customer will follow PanAmSat's procedures for initiating or terminating any t r ansmission to the Satellite. Customer will operate all transmit facilities in a manner that allows for cessation of, and will cease, transmission immediately upon receiving notice from PanAmSat under Section 14.5(a) ("Telephone Notices"). Customer will fu rnish information on a continuing basis as required by PanAmSat to prepare for, initiate, provide, maintain and immediately discontinue the use of the Service upon notice by PanAmSat.



PanAmSat shall have the right, but not the obligation, to inspect any Customer-Provided Facilities together with associated facilities and equipment used by Customer, or by a third party under the authority of Customer, to transmit to the Service Tra nsponder.





PanAmSat will use all reasonable efforts to schedule inspections to minimize the disruption of the operation of the facilities, and Customer shall make the facilities available for inspection at all reasonable times. Customer shall, upon PanAmSa t's request, provide measured proof that any transmit facility meets or exceeds the sidelobe envelope described in Appendix D.



ARTICLE 5. OUTAGES.



5.1 Confirmed Outage. There shall be deemed to have occurred a "Confirmed Outage" of Service on the Service Transponder if Service on the Service Transponder fails to meet the Service Specifications for a continuing and uninterrupted period of thirty (30) minutes and such failure is confirmed by PanAmSat. Any Outage Credits shall be measured in acco rdance with the procedures set forth in Section 5.2. PanAmSat agrees to respond promptly in determining whether any Service failure constitutes a Confirmed Outage for purposes of this Article.



5.2 Outage Credits. If there is a Confirmed Outage of Service on the Service Transponder during the Service Term, PanAmSat shall credit to Customer's next payment an "Outage Credit" that shall be determined by the following formula:



Outage Credit equals:



N multiplied by S;

-----



where,



N = the number of hours (or portion thereof) during a month that

there is a Confirmed Outage on a particular Transponder



M = the number of hours in the month, and



S = Customer's Service Fee, applicable to the affected Service

Transponder, for said month







Customer shall not be entitled to any Outage Credit for any Service failure that does not constitute a Confirmed Outage. For purposes of determining Outage Credits, each failure that is confirmed by PanAmSat shall be measured as commencing from the later t o occur of (i) Customer's cessation of use of the affected Service Transponder or (ii) notice from Customer to PanAmSat of such failure. Any such failure shall be deemed to have ended upon the earlier to occur of (i) Customer's resumption of use of the Se rvice or (ii) notice to Customer that Service on the affected Service Transponder has been restored to the Service Specifications.



5.3 Transponder Service Failure. If, after the Service Date, the Service Transponder fails to meet the Service Specific ations for: (a) any period of six (6) consecutive hours, or (b) a cumulative period of twelve (12) hours during any consecutive 30-day period, or (c) any period of time following a catastrophic event under circumstances that make it clearly ascertainable t hat a failure described in clauses (a) or (b) will occur. Service on such Transponder shall be deemed to have failed on a Confirmed Basis. Any such failure must be confirmed by PanAmSat. If confirmed, the failure shall be measured as commencing from the l a ter to occur of (i) Customer's cessation of use of the affected Service Transponder or (ii) notice from Customer to PanAmSat of such failure. Any such failure shall be deemed to have ended upon the earlier to occur of (i) Customer's resumption of use of t he Service or (ii) notice from PanAmSat to Customer that Service on the affected Service Transponder is capable of meeting the Service Specifications.



In the event Service on the Service Transponder fails on a Confirmed Basis, PanAmSat shall, as soon as possible and to the extent technically feasible, employ certain redundant equipment units, as described in Appendix B ("Spare Equipment") on a first-needed, first-served basis as among Customer and other Transponder owners, lessees, and users, includin g without limitation, PanAmSat and its predecessors in interest ("Protected Parties"), as a substitute for a Service Transponder equipment unit which has failed; provided, that PanAmSat may elect to use "Substitute Capacity" (as provided by the following s entence), if available, in lieu of using Spare Equipment. For the avoidance of



doubt, once Spare Equipment is employed to restore Service, such Spare Equipment becomes part of the Service Transponder and Service to Customer cannot be preempted to allow PamAmSat to utilize such Spare Equipment for another Protected Party.



If (a) the Service Transponder fails to meet its Service Specifications on a Confirmed Basis, and (b) the Spare Equipment associated with the Service Transponder is not available, and (c) equivalent capacity on another Transponder meeting the Service Specifications in the same Beam of the Satellite as the Service Transponder and designated by PamAmSat for the provision of data service (the "Substitute Capacity"), is available, and its use by Customer in accordance with PamAmSat's Operational Requirements would not be predicted to interfere with the use or rights of others using the Satellite, then PamAmSat shall, as soon as possible and to the extent technically feasible, employ such S u bstitute Capacity for the Service Transponder to satisfy PamAmSat's Service obligations under this Agreement; provided, that if the Substitute Capacity is one of the three Transponders on the Satellite which is then subject to a security interest and lien in favor of Hughes Aircraft Company (a "Hughes Secured Transponder"), PamAmSat's obligation to use the Substitute Capacity shall be subject to Hughes' consent (if required) to the provisions set forth in this Agreement regarding subordination (and other a s pects of this Agreement as related to this decision). PamAmSat may condition its provision of Substitute Capacity on Customer's acceptance, in writing, of additional restrictions on its use so as to protect other Protected Parties from interference. If Cu s tomer does not accept such conditions, PamAmSat shall not be obligated to provide Customer with the Substitute Capacity. In the event that PamAmSat employs such Substitute Capacity for the Service Transponder, such Substitute Capacity shall be deemed to b e the Service Transponder for all purposes under this Agreement.



In the event that two or more Transponders simultaneously fail to meet their respective service or performance specifications and are entitled to restoral under any applicable agreement with PamAmSat, then the Protected Party who first executed a definitive agreement as to the affected Satellite with PamAmSat or its predecessors in interest shall, to the extent technically feasible, have priority as to use of the Spare Equipment or the







Substitute Capacity; provided that, if Transponders are employed by more than one Protected Party, PanAmSat's decision shall be made in accordance with the order that the earliest Protected Party(ies) using the Transponder(s) executed agreements with PanA mSat or its predecessors in interest; and further provided that if a failed Transponder is a Hughes Secured Transponder, PanAmSat may give priority to such Hughes-Secured Transponder(s). Without regard to Hughes Secured Transponders or whether particular c ustomers will receive Service from Hughes Secured Transponders, prior to the execution of this Agreement,______ Protected Parties have executed agreements with PanAmSat for services from C-band transponder capacity on the Satellite. Promptly following the execution of this Agreement by both parties, PanAmSat shall provide Customer with a list identifying those entities with a higher priority than Customer for this purpose. It is understood that entities with a higher priority includes the assigns of and su c cessor(s) in interest to the listed parties. As used in this Section 5.3, the term "simultaneously" shall be deemed to mean occurring within a 12-hour period. All determinations as to when failures requiring protection shall have occurred, for purposes of determining whether the failures are "simultaneous," shall be made by PanAmSat in its sole discretion.



5.4 Customer Cooperation. If the Service fails to meet the Service Specifications, Customer shall use all reasonable efforts to cooperate and aid PanAmSat in curing such failure; provided that all reasonable efforts can be done at no cost to Customer. These obligations of Customer shall include, but not be limited to, the following:



(a) At the request of PanAmSat, if there is a problem that can be compensated for by increasing the power of its transmission to the Satellite, without affecting its Service, Customer shall do so to the extent it can with existing equipment; and



(b) Permitting PanAmSat, at PanAmSat's option, and at PanAmSat's cost and expense, to upgrade the Customer-Provided Facilities; provided such upgrade is implemented in accordance with standard engineering practices in the industry.







5.5 Application to Individual Service Transponders. All determinati ons as to Confirmed Outages, failures of Service on a Confirmed Basis, Outage Credits, and protection rights to be made under this Article 5 shall be made on an individual Service Transponder by Service Transponder basis.



ARTICLE 6. PREEMPTIVE RIGHTS.



6.1 (a) Preemptive Rights In Abnormal Circumstances. Customer recognizes that it may be necessary, in unusual or abnormal technical situations or other unforeseen conditions, for PanAmSat deliberately to preempt or interrupt Service to Customer fro m , and Customer's use of, the Service Transponder, solely in order to protect the overall health and performance of the Satellite. Such decisions shall be made by PanAmSat in its sole discretion. To the extent technically feasible, PanAmSat shall give Cust o mer at least 24 hours' notice of such preemption or interruption and will use all reasonable efforts to schedule and conduct its activities during periods of such preemption or interruption so as to minimize the disruption of the services on the Satellite . Customer shall immediately cease transmissions to the Satellite at such time as its Service is preempted or interrupted pursuant to this Section. To the extent that such preemption results in a loss to Customer of Service from the Service Transponder suf ficient to constitute a Confirmed Outage or the failure of Service on a Confirmed Basis, Customer shall have all the rights and remedies regarding Outage Credits and termination set forth in Articles 5 and 7.



(b) Testing in the Event of Service Failure. If the Service is not meeting Service Specifications, but Customer elects to continue to use (and pay for) the Service, as degraded, PanAmSat may interrupt Customer's use as necessary to perform testing or take any other action that may be approp r iate to attempt to restore Service to Specifications. In such event, PanAmSat shall coordinate activities with affected customer(s) and shall use all reasonable efforts to minimize the overall disruption of Service to affected customer(s). Customer shall be entitled to Outage Credits for periods of interruption in accordance with Section 5.2.







ARTICLE 7. TERMINATION RIGHTS.



7.1 Termination for Delay in, or Failure Prior to, Service Date. PanAmSat shall keep Customer reasonably apprised of changes i n the anticipated service commencement date and shall provide Customer with quarterly updates as to the then-anticipated service commencement date. If the Service Date does not occur on or before the date that is four (4) months after the Latest Anticipat e d Service Commencement Date or such later date as Customer and PanAmSat may have agreed to, then either party may terminate this Agreement on notice to the other party. PanAmSat shall also be permitted to terminate this Agreement on notice to Customer, if PanAmSat determines because of force majeure conditions not to proceed with the construction or launch of the Satellite.



This Agreement shall also terminate, prior to the Service Date, in any of the following events: (i) if there is a launch failure that results in destruction of the Satellite; (ii) at PanAmSat's option, if the Satellite, while not destroyed, is a "Total Loss" under PanAmSat's launch insurance policy; or (iii) if, after a launch, which is not a launch failure, the Service Transponder is incapable of meeting the Service Specifications, unless Spare Equipment or available Substitute Capacity for the Service Transponder is provided by PanAmSat in accordance with Section 5.3.



7.2 Reserved.



7.3 Termination For Service Failure After Service Has Commenced. This Agreement shall automatically terminate if, after the Service Date the Service Transponder fails on a Confirmed Basis, unless, within thirty days of such failure, PanAmSat provides Service meeting t ...