Transponder Service Agreement - Califa Entertainment Group Inc. and Loral SpaceCom Corp. d/b/a Loral Skynet
CALIFA
02/08/99
Final
AGREEMENT BETWEEN
CALIFA ENTERTAINMENT GROUP, INC.
AND
LORAL SKYNET(R)
CONCERNING SKYNET TRANSPONDER SERVICE
This agreement (the "Agreement") is made this 8th day of February,
1999 by and between Califa Entertainment Group, Inc., a corporation organized
and existing under the laws of the State of California and having its primary
place of business at 15127 Califa St., Van Nuys, CA 91411 (hereinafter referred
to as "CUSTOMER" which expression shall include its successors and permitted
assigns) and Loral SpaceCom Corporation, a corporation organized and existing
under the laws of the State of Delaware, doing business as LORAL SKYNET, and
having a place of business at 500 Hills Drive, Bedminster, New Jersey 07921
(hereinafter referred to as "SKYNET" which expression shall include its
successors and permitted assigns).
WITNESSETH:
WHEREAS, SKYNET has launched its Telstar 5 satellite for the purpose
of providing service to commercial services on such satellite;
WHEREAS, pursuant to an Asset Purchase Agreement dated May 29, 1998
between Spice Entertainment Companies, Inc. ("Spice"), and CUSTOMER, CUSTOMER
has agreed to acquire the assets of a certain programming network currently
operated by Spice, which Asset Purchase Agreement is not effective until the
closing of that certain merger between Spice and Playboy Enterprises, Inc. (the
"Closing").
WHEREAS, CUSTOMER desires to obtain service on C-band Telstar 5
Satellite ("Telstar 5") transponders to be used for commercial satellite
transmission service and;
WHEREAS, it is a condition precedent to the effectiveness of this
Agreement that the Closing occur, but if it does occur, this Agreement shall be
effective as of the Closing, and;
WHEREAS, this agreement shall be in effect and the satellite
services provided hereunder shall be provided by SKYNET to CUSTOMER on a
non-common carrier basis such that the terms and conditions of the use of these
services are governed solely by this Agreement and not by a tariff filed with
the Federal Communications Commission ("Commission").
-----------------------------
SKYNET(R) is a registered trademark of Loral SpaceCom Corporation
LORAL SKYNET PROPRIETARY
<PAGE>
2 CALIFA
11/9/98
Final
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) 36 MHz, C-Band, 20 Watt fully
protected transponder (hereinafter referred to as the "Fully
Protected" transponder) on Telstar 5 beginning effective ________
[concurrent with the termination of the existing Spice/SKYNET
contract and the closing of that certain merger between Spice and
Playboy Enterprises, Inc.] and terminating on the end of life of the
satellite.
1.2 The service as described in Section 1.1 above shall hereinafter be
referred to as the "Service".
1.3 The Service is furnished to CUSTOMER subject to the Agreement
including terms and conditions set forth in Codicil 1 ("TERMS AND
CONDITIONS") attached hereto and incorporated by reference.
2. RATES
CUSTOMER shall pay a monthly rate for the Service as set forth in
the following table:
Monthly Rate
Quantity Service Satellite Term Per Transponder
--------------------------------------------------------------------------------
1 36 MHz 20W C-band Telstar 5 Start of Service $ 145,000.00
Fully Protected (see Section 1.1)
thru T5 End of Life
3. OPTIONS
3.1 TO ADD ADDITIONAL CAPACITY
CUSTOMER shall have the option to acquire an additional 36 MHz Fully
Protected transponder on either Telstar 6, or Telstar 7, depending on
availability and subject to Section 3.2 below, by providing thirty (30) day
written notice to SKYNET for a start of service no later than August 31, 1999.
The rate for the additional transponder shall be $145,000/mo. The additional
transponder will co-terminate with the existing Service provided under this
Agreement.
LORAL SKYNET PROPRIETARY
<PAGE>
3 CALIFA
11/9/98
Final
3.2 RIGHT OF FIRST REFUSAL
For the period ending August 1, 1999, SKYNET shall provide CUSTOMER
with a Right-of First Refusal at the time a bona fide offer is received by
SKYNET for the last Fully Protected "C"-Band transponder available on Telstar 6
and Telstar 7. In order to implement such Right-of First Refusal, SKYNET shall
provide CUSTOMER with written notice of such bona fide offer. If CUSTOMER
chooses to lease the transponder in question, CUSTOMER must respond, in writing,
to SKYNET within seven (7) calendar days and Service must begin no later than
August 31, 1999 at a rate of $145,000/mo.. Failure to respond to SKYNET's
notification will be deemed a refusal of SKYNET's offer.
4. TRANSPONDER LOADING
The monthly rate as set forth in Section 2 ("RATES") for the Service
includes intrasatellite and intersatellite transponder management for the uplink
of up to a maximum of six (6) carriers per transponder, subject to
intrasatellite and intersatellite coordination, for its initial loading plan
("Initial Loading Plan"). In the event CUSTOMER implements a Different Loading
Plan, pursuant to Paragraph 8 ("USE OF THE TRANSPONDER") of Codicil 1, or if
CUSTOMER notifies SKYNET that it desires to implement a Different Loading Plan,
SKYNET shall extend reasonable efforts to effect such intrasatellite and
intersatellite coordination. Any changes to such Initial Loading Plan shall be
subject to the provisions of Codicil 1 Paragraphs 8 ("USE OF THE TRANSPONDER")
and 9 ("MULTIPLE CARRIER CHARGE"). The number of channels within a carrier shall
not be unreasonably restricted by SKYNET.
5. 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 hand, confirmed
facsimile, or mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(i) If to CUSTOMER: Califa Entertainment Group, Inc.
Mr. Steven Hirsch
15127 Califa St.
Van Nuys, CA 91411
Phone: 818-908-0404
Fax: 818-908-0588
LORAL SKYNET PROPRIETARY
<PAGE>
4 CALIFA
11/9/98
Final
Copy to: Lipsitz, Green, Gahringer, Roll, Salisbury &
Attention: Paul Cambria, Jr., Esq.
42 Delaware Avenue
Suite 300
Buffalo, New York, 14202
Phone: 716-849-1333 Ext. 346
Fax: 716-855-1580
(ii) If to SKYNET LORAL SKYNET
500 Hills Drive
Bedminster, NJ 07921
ATTN: Ted Corus
Director - North America Sales
Room 3B26
Phone: (908) 470-2320
Fax: (908) 470-2320
Copy to: LORAL SKYNET
500 Hills Drive
Bedminster, NJ 07921
ATTN: Daniel J. Zaffarese
Contract Manager-
Room 3A20
Phone: (908) 470-2352
Fax: (908) 470-2453
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.
6. 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
LORAL SKYNET PROPRIETARY
<PAGE>
5 CALIFA
11/9/98
Final
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.
CALIFA ENTERTAINMENT GROUP, INC. LORAL SKYNET
By: /s/ Steven Hirsch By: /s/Ted Corus
---------------------------- -----------------------------------
Title: President Title: Vice President, Sales
------------------------ -------------------------------
Date: 2/9/99 Date: 3/5/99
-------------------------- --------------------------------
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 1 of 11
CODICIL 1
TERMS AND CONDITIONS
OF THE
AGREEMENT BETWEEN
CALIFA / PLAYBOY
AND
LORAL SKYNET
CONCERNING SKYNET(R) TRANSPONDER CAPACITY
1. WARRANTY EXCLUSIONS
SKYNET WARRANTS TO CUSTOMER THAT SKYNET WILL PERFORM THE SERVICES
DEFINED HEREIN IN ACCORDANCE WITH GENERALLY ACCEPTED INDUSTRY STANDARDS. 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 Agreement. 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.
Monthly charges will be billed in advance, except where prohibited by law. For
billing purposes each month is considered to have thirty (30) days. Payment is
due on or before the first day of each month for Services to be provided that
month. Service may be discontinued for nonpayment of a bill, in accordance with
Paragraph 20.
2.1 SECURITY PAYMENT
To safeguard its interests, SKYNET may require Customers to remit a
security deposit, which will be held as a guarantee for the payment of charges.
This security deposit does not relieve the Customer of the responsibility for
the prompt payment of bills upon presentation. The security deposit will not
exceed an amount equal to three times the monthly charge. 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. The Security Deposit may be required, at SKYNET's discretion, if
CUSTOMER fails to make timely payments. Simple interest at the rate of six
percent annually will be paid to the Customer for the period that a cash deposit
is held by the Company. However, if the appropriate legal authority in the state
where the Customer's office responsible for bill payment is located establishes
a different rate of interest, then that rate will apply.
3. INTEREST ON LATE PAYMENTS
Any late payments by CUSTOMER of amounts due and payable hereunder
(including but not limited to, specified payments, damages, and indemnification)
to SKYNET shall be with interest 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.
4. TAXES
4.1 Other than for taxes on SKYNET'S net income, CUSTOMER agrees to pay
all applicable sales, gross receipts, Universal Service Fund
assessments, use and transfer taxes, similar taxes, or impositions,
or levies by whatever name ("Taxes") that are directly levied on
account of the Service on or after the consummation of the
Agreement, excluding license or permit fees imposed generally upon
SKYNET's operation of any SKYNET satellite or earth station. Taxes
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
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 2 of 11
cost and expense. If any Taxes increase the CUSTOMER's annual cost
of the Service provided hereunder by more than twenty-five percent
(25%), the CUSTOMER may terminate the Service upon not less than
thirty (30) days written notice to SKYNET. Any notice of termination
must be delivered no more than thirty (30) days after CUSTOMER has
been notified of the imposition of such Taxes that will result in
increasing the CUSTOMER's annual cost of Service.
4.2 Notwithstanding anything to the contrary contained in the 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.
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, or federal tax authority.
5. TYPES OF SERVICE
FULLY PROTECTED SERVICE (If Applicable)
"Fully Protected" transponders, in the event of failure, shall be
restored using spare equipment that may be available on the satellite at the
time of failure, or on a comparable transponder on the same satellite, or on
another SKYNET satellite then in orbit, pursuant to Paragraph 7 ("RESTORATION OF
A FULLY PROTECTED FAILED TRANSPONDER") hereof, except where the failure is
caused by the actions or inaction's of Customer not pursuant to directions of
SKYNET. Fully Protected transponders are not preemptible.
NON-PREEMPTIBLE SERVICE (If Applicable)
"Non-Preemptible" transponders are not protected in the event of
failure, and are not subject to preemption (non-preemptible) to restore any
other customers protected service.
PREEMPTIBLE SERVICE (If Applicable)
"Preemptible" transponders are not protected in the event of
failure. Preemptible transponders may be preempted on a permanent or temporary
basis to restore protected service. If CUSTOMER continues to use any Preemptible
transponder longer than five minutes following notification or attempted
notification by SKYNET of its preemption to restore a protected service, a
Preemption Notification Charge shall apply at the rate of $1,100.00 per minute,
or each fraction thereof, for each minute after such five minute period. For
purposes of notification concerning preemption of any Preemptible transponder,
CUSTOMER shall specify, in writing to SKYNET prior to the start of Service
provided under the Agreement, a telephone number or numbers where designated
CUSTOMER personnel may be reached by SKYNET. Such contact telephone number(s)
and Customer personnel shall remain in effect until further written notice is
given, if ever, by CUSTOMER, changing the designated contact telephone number(s)
and/or personnel. The five minute notification period specified above shall
begin to run from the time the telephone call is completed with the CUSTOMER
representative, or from the time of attempted notification of CUSTOMER if there
is no answer at the Customer designated telephone number. Nothing in the
Agreement shall prevent SKYNET from taking any action that it is required by law
to take in accordance with the provisions of Section 706 of the Communications
Act of 1934, as amended, 47 U.S.C. ss. 606. If Preemptible Service is
temporarily preempted, CUSTOMER will be credited for the period of interrupted
service as follows: The effective rate of each Preemptible transponder for the
purposes of calculating credit due to preemption shall be the monthly rate
divided by the number of transponders being furnished at that time. The actual
amount credited shall be pro-rated based on the actual time CUSTOMER is without
the transponder service. Notwithstanding anything in this Agreement, to the
extent CUSTOMER does not comply with any permitted preemption, SKYNET shall have
the right to prevent CUSTOMER's use of the preempted service, including SKYNET's
right to deny, temporarily suspend, or terminate the service permanently without
further notice.
BUSINESS PREEMPTIBLE SERVICE (If Applicable)
"Business Preemptible" transponders are not protected in the event
of failure. Business Preemptible transponders may be preempted on a permanent or
temporary basis as follows: (1) with five (5) minutes notice to restore
protected service, or (2) with not less than thirty (30) days notice for any
reason at the sole discretion of SKYNET (hereinafter referred to as
"Discretionary Preemption"). If CUSTOMER continues to use any Business
Preemptible transponder longer than five minutes following notification or
attempted notification by SKYNET of its preemption to restore a protected
service, or if CUSTOMER continues to use any Business Preemptible transponder
five (5) minutes beyond 12:00:01 AM Eastern Time on the effective date of
preemption in the case of a Discretionary Preemption, a Preemption Notification
Charge shall apply at the rate of $1,100.00 per minute, or each fraction
thereof, for each minute after such five minute period, in either case such
charge is in addition to any remedy SKYNET may have hereunder. For purposes of
notification concerning preemption of any Business Preemptible transponder to
restore a protected service, CUSTOMER shall specify, in writing to SKYNET prior
to the start of Service provided under the Agreement, a telephone number or
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 3 of 11
numbers where designated CUSTOMER personnel may be reached by SKYNET. Such
contact telephone number(s) and Customer personnel shall remain in effect until
further written notice is given, if ever, by CUSTOMER, changing the designated
contact telephone number(s) and/or personnel. In the event of a Discretionary
Preemption of any Business Preemptible transponder, SKYNET shall notify CUSTOMER
in writing pursuant to Section 4 ("NOTICES") of the Agreement. In the event any
Business Preemptible transponder is preempted to restore any protected service,
the five minute notification period specified above shall begin to run from the
time the telephone call is completed with the CUSTOMER representative, or from
the time of attempted notification of CUSTOMER if there is no answer at the
Customer designated telephone number. Nothing in the Agreement shall prevent
SKYNET from taking any action that it is required by law to take in accordance
with the provisions of Section 706 of the Communications Act of 1934, as
amended, 47 U.S.C. ss. 606. If Business Preemptible Service is temporarily
preempted, CUSTOMER will be credited for the period of interrupted service as
follows: The effective rate of each Business Preemptible transponder for the
purposes of calculating credit due to preemption shall be the monthly rate
divided by the number of transponders being furnished at that time. The actual
amount credited shall be pro-rated based on the actual time CUSTOMER is without
the transponder service. Notwithstanding anything in this Agreement, to the
extent CUSTOMER does not comply with any permitted preemption, SKYNET shall have
the right to prevent CUSTOMER's use of the preempted service.
6. TRANSPONDER INTERRUPTION OR FAILURE
For the purpose of the Agreement; (i) an interruption
("Interruption") shall be defined as any period during which a transponder fails
to meet the performance parameters set forth in Exhibit A ("PERFORMANCE
PARAMETERS") attached hereto and incorporated by reference, as measured by
SKYNET at its earth station in Hawley, Pennsylvania, such that the transponder
is precluded from being used for its intended commercial purpose, and (ii) 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 Paragraph 6 ("TRANSPONDER INTERRUPTION OR FAILURE"),
measurement of periods of Interruption or Failure shall commence only upon
CUSTOMER's written or verbal notification to SKYNET's Hawley 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.
7. RESTORATION OF A FAILED TRANSPONDER
FULLY PROTECTED TRANSPONDER (If Applicable
In the event any Fully Protected transponder provided hereunder
fails, pursuant to Paragraph 6 ("TRANSPONDER INTERRUPTION OR FAILURE") hereof,
and if SKYNET is unable to restore service on the affected transponder by
switching in spare equipment that may be available on the satellite at the time
of such failure, then SKYNET shall restore such service either (1) on a
transponder of the same frequency band, having the same or greater bandwidth and
the same power as the failed transponder, on the same satellite or (2) on a
transponder of the same frequency band, having the same or greater bandwidth,
the same or different power, the same or greater EIRP, and substantially
equivalent domestic footprint, but no less than the same number of States
included in the failed transponder footprint, on another SKYNET satellite then
in orbit. Such transponder will then become the Fully Protected Transponder.
NON-PROTECTED TRANSPONDER (If Applicable)
In the event any non-protected transponder provided hereunder fails,
pursuant to Paragraph 6 ("TRANSPONDER INTERRUPTION OR FAILURE") hereof, SKYNET
may, in its sole discretion, attempt to restore service on the affected
transponder using spare equipment on the satellite. If SKYNET is unable to
restore service on the affected transponder by switching in spare equipment that
may be available 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. Such transponder will then become the non-protected
transponder; provided, however, if SKYNET offers to restore the affected
Transponder Service on a satellite other than the satellite on which the failed
transponder was provided, then CUSTOMER may reject Service on such transponder
with notice to SKYNET within twenty four (24) hours of SKYNET having offered
such transponder to CUSTOMER. If SKYNET does not restore or attempt to restore
Service, or CUSTOMER rejects, such service on the affected transponder(s) will
terminate as of the moment of the failure pursuant to Paragraph 20.3
("TERMINATION") hereof.
8. USE OF THE TRANSPONDER(S)
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 4 of 11
The monthly rate as set forth in Section 2 ("RATES") of the
Agreement includes intrasatellite and intersatellite transponder management for
the uplink of carriers as set forth in Section 3 ("TRANSPONDER LOADING") of the
Agreement, to each of the transponders provided hereunder for each of their
initial loading plan ("Initial Loading Plan").
For purposes of the Agreement the carriers will be classified and defined as
follows:
(1) Digital Carriers: A "Digital Carrier" is a radio signal whose
carrier phase and or amplitude takes on discrete values during a
modulation symbol in response to balanced amplitude modulation by a
raised cosine filtered impulse train representing digital
information for any purpose including but not limited to video,
voice, or data. Digital Carrier types include Binary Phase Shift
Keying, Quadrature Phase Shift Keying, 8 state Phase Shift Keying,
and 16 state Quadrature Amplitude Modulation.
(2) FM Television Carriers: An "FM Television Carrier" is a radio signal
whose carrier is modulated continuously in frequency or phase by a
baseband video signal whose format, before any encryption or
information compression technique, conforms to any video standard
including, but not limited to, NTSC, PAL or SECAM.
(3) Other Types Of Carriers: For purposes of the Agreement "Other Types
Of Carriers" are cases not covered under either "Digital Carriers"
or "FM Television Carriers".
If CUSTOMER desires to transmit to any transponder provided under
the Agreement in any manner different ("Different Loading Plan") than such
transponders Initial Loading Plan, then the following shall apply:
(i) If the Different Loading Plan involves Digital Carriers, then
CUSTOMER may implement such Different Loading Plan at any time,
provided that CUSTOMER shall provide the Different Loading Plan to
SKYNET, no later than fourteen (14) days after 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 transponder,
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 the 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 the Agreement.
9. MULTIPLE CARRIER CHARGE
9.1 To the extent that SKYNET authorizes any transponder for use of
Multiple Carriers where the number of carriers is a greater number
than its Initial Loading Plan, whether analog or digital, then
beginning with the scheduled start date of such Multiple Carriers,
SKYNET shall bill, and CUSTOMER shall pay, a Multiple Carrier Charge
for the maximum number of carriers authorized by SKYNET for the
affected transponder, whether or not CUSTOMER actually uplinks to
the affected transponder in a manner that utilizes such maximum
number of carriers. The per carrier rate for such Multiple Carrier
Charge shall be seven hundred ($700.00) dollars per month for each
carrier added to the affected transponders Initial Loading Plan. For
purposes of clarification, a carrier may contain any number of
channels.
9.2 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, then CUSTOMER shall be charged twice the
monthly Multiple Carrier Charge, per month, for each unauthorized
carrier for as long as said carrier(s) is (are) in operation and
unauthorized. Furthermore, SKYNET may, in its sole discretion,
require CUSTOMER to discontinue the use of such
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 5 of 11
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 the Agreement, including by way of
illustration and not of limitation, Paragraph 8 ("USE OF THE
TRANSPONDER(S)") and this Paragraph 9 ("MULTIPLE CARRIER CHARGE").
10. LIMITATION OF LIABILITY
10.1 SKYNET'S LIABILITY, IF ANY, FOR ITS WILLFUL MISCONDUCT IS NOT
LIMITED BY THE AGREEMENT. WITH RESPECT TO ANY OTHER 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 PARAGRAPHS 10.2. AND 10.5
FOLLOWING, SKYNET'S LIABILITY, IF ANY, SHALL NOT EXCEED AN AMOUNT
EQUAL TO THE PROPORTIONATE CHARGE PROVIDED FOR UNDER THE 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 THE AGREEMENT AS A CREDIT ALLOWANCE FOR
INTERRUPTIONS DESCRIBED HEREIN.
10.2 SKYNET IS NOT LIABLE FOR DAMAGES ASSOCIATED WITH SERVICE, CHANNELS,
OR EQUIPMENT, WHICH IT DOES NOT FURNISH.
10.3 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 THE AGREEMENT, INVOLVING:
10.3.1. CLAIMS FOR LIBEL, SLANDER, INVASION OF PRIVACY, INFRINGEMENT OF
COPYRIGHT, OR ANY CLAIM BASED ON THE CONTENT OF ANY TRANSMISSION
ARISING FROM ANY COMMUNICATION;
10.3.2. CLAIMS FOR PATENT INFRINGEMENT ARISING FROM COMBINING OR USING THE
SERVICE FURNISHED BY SKYNET IN CONNECTION WITH FACILITIES OR
EQUIPMENT FURNISHED BY OTHERS; OR
10.3.3. ALL OTHER CLAIMS ARISING OUT OF ANY ACT OR OMISSION OF OTHERS
RELATING TO SERVICES PROVIDED PURSUANT TO THE AGREEMENT.
SKYNET will use reasonable efforts to give CUSTOMER prompt notice
of any claim that might cause SKYNET to rely on the provisions of
this Paragraph 10.3.
10.4 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 THE AGREEMENT. SKYNET WILL
DEFEND CUSTOMER AGAINST CLAIMS OF PATENT INFRINGEMENT ARISING SOLELY
FROM THE USE BY CUSTOMER OF SERVICES OFFERED UNDER THE AGREEMENT AND
WILL INDEMNIFY CUSTOMER FOR ANY DAMAGES AWARDED BASED SOLELY ON SUCH
CLAIMS.
10.5 SKYNET'S FAILURE TO PROVIDE OR MAINTAIN SERVICES UNDER THE AGREEMENT
SHALL BE EXCUSED BY LABOR DIFFICULTIES, GOVERNMENTAL ORDERS, CIVIL
COMMOTIONS, ACTS OF GOD AND OTHER CIRCUMSTANCES BEYOND SKYNET'S
REASONABLE CONTROL, SUBJECT TO THE CREDIT ALLOWANCE FOR
INTERRUPTIONS PROVISIONS OF THE AGREEMENT.
10.6 NOTWITHSTANDING ANYTHING TO THE 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.
11. 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 the 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
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 6 of 11
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 which 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.
12. CREDIT ALLOWANCES
Credit allowances, may be given to CUSTOMER for Interruptions and/or
Failures as defined in Paragraph 6 ("TRANSPONDER 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 a transponder to
be interrupted or failed and releases the affected transponder for testing and
repair. An Interruption or Failure period ends when the affected transponder is
operative. If CUSTOMER reports a transponder 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. Such credit allowance will be
given for any Interruption or Failure of thirty (30) minutes or more, in one
minute increments for each occurrence for the period of time when the
transponder is Interrupted or Failed, except when Interrupted or Failed for any
of the following reasons:
(1) Interruptions or Failures caused by the action or failure to act of
CUSTOMER or others authorized by CUSTOMER to use the affected
transponder, not pursuant to the directions of SKYNET.
(2) Interruptions or Failures during periods when CUSTOMER elects not to
release the affected transponder for testing.
(3) Interruptions or Failures due to the effects of sun transit on
receiving earth stations.
13. CONTENT OF TRANSMISSIONS
CUSTOMER is solely responsible for the content of transmissions using the
transponder and related service.
14. SCRAMBLING
Prior to commencing use of the Service provided under the 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 pornographic 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.
15. REFUSAL OF SERVICE
SKYNET may terminate, prevent or restrict any communications using
the Service provided hereunder as a means of transmission if such actions (1)
are undertaken at the direction of a governmental agency with colorable
jurisdiction (including the Commission) or (2) are taken subsequent to the
institution against SKYNET or any of its permitted assignees, any legal entity
affiliated with any of them, or any of the directors, officers, agents or
employees of them, of criminal or administrative proceedings or investigations
based upon the content of such communications, other than civil proceedings or
(3) are taken as a result of a judgement on the merits against CUSTOMER or any
permitted assignee of CUSTOMER, of criminal liability based upon the content of
such communications. SKYNET will not terminate, prevent or restrict CUSTOMER's
transmissions pursuant to such clause if, promptly upon notification by SKYNET
of the institution of such proceedings or investigations, CUSTOMER is able to
satisfy SKYNET, subject to SKYNET's sole and reasonable discretion, that within
forty-eight (48) hours the aforementioned proceedings are resolved to SKYNET's
satisfaction or the relevant transmissions will
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 7 of 11
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 10
(LIMITATION OF LIABILITY) or any obligation to pay the rates in Section 2
(RATES) of the Agreement throughout its period.
16. ASSIGNMENT / RESALE
16.1 ASSIGNMENT
CUSTOMER acknowledges and agrees that notwithstanding anything to
the contrary contained in the Agreement, CUSTOMER shall not transfer or assign
any of its rights or obligations under the Agreement to any third parties
without SKYNET's consent, which shall not be unreasonably withheld. SKYNET
expressly shall have the right to assign the Agreement including its rights,
duties and obligations hereunder, to its parent corporation or any present or
future affiliate or subsidiary of SKYNET, or in connection with the merger or
acquisition of its satellite business.
16.2 RESALE
For as long as the 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 so. 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, 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.
17. NON-INTERFERENCE
CUSTOMER's radio transmissions (and those of its uplinking agents)
to the satellite shall comply, in all material respects, with all FCC and all
other governmental (whether 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, and any
backup transponders to which CUSTOMER is given access pursuant to the Agreement
and shall not interfere with the use of any other transponder or cause physical
harm to the Transponder, any backup transponder to which CUSTOMER is given
access pursuant to the Agreement, any other transponders, or to the satellite on
which the Transponder is located. 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 transponders on the satellite, its transmissions to the satellite, so as to
minimize adjacent channel and adjacent satellite interference. For purposes of
this Paragraph 17, interference shall also mean acts or omissions, which cause a
transponder to fail to meet its transponder performance parameters. Without
limiting the generality of the foregoing, CUSTOMER (and its uplinking agents)
shall comply with all FCC rules and regulations regarding use of automatic
transmitter identification systems (ATIS).
18. IMPROPER ILLUMINATION
In the event improper illumination of any transponder provided under
the 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.
19. GENERAL OBLIGATIONS
In the event CUSTOMER breaches any of its obligations in connection
with the usage procedures and restrictions described in the Agreement,
including, without limitation, transponder 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
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 8 of 11
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 reasonable attorney's fees) incurred
in connection with SKYNET's enforcement against CUSTOMER arising out of
CUSTOMER's use of the affected transponder(s). Notwithstanding the foregoing in
this paragraph 19 ("GENERAL OBLIGATIONS"), in the event SKYNET requires CUSTOMER
to cease transmissions pursuant to this Section 19, and if such action is
subsequently brought to arbitration pursuant to Section 34 ("ARBITRATION")
herein, if the arbitrator rules that CUSTOMER should not have been required to
cease transmissions, or if SKYNET independently determines that CUSTOMER should
not have been required to cease transmissions, then CUSTOMER will have no
obligation to pay such SKYNET expenses.
20. TERMINATION
The Agreement may be terminated prior to the end of its term as
follows:
20.1 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
with fifteen (15) days prior written notice citing the cause of such
termination, which period may be used to cure.
20.2 In the event that the satellite that the Service is intended to be
provided on 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 Paragraph 20.2 being referred to herein as a "Launch Failure"),
either party may terminate the 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.
20.3 In the event of a failure, as defined in Paragraph 6 (TRANSPONDER
INTERRUPTION OR FAILURE), of a non-protected transponder for which
SKYNET does not provide an acceptable restoration, as defined in
Paragraph 7 ("TRANSPONDER INTERRUPTION OR FAILURE"), within 10 days,
the customer or SKYNET may terminate this Agreement without
liability except for such services as have already been received.
The termination date will be considered to be the date of the
failure.
21. EARLY TERMINATION
Subject to Paragraph 20 ("TERMINATION") hereof, no early
termination date is provided under the Agreement. Therefore, in the
event CUSTOMER orders the discontinuance of Service, effective on
any date prior to the termination date set forth in Section 1
("SKYNET SERVICES") of the Agreement, or if the Agreement is
terminated by SKYNET due to CUSTOMER's breach with respect to the
Service provided under the Agreement prior to the termination date
set forth in Section 1 ("SKYNET SERVICES") of the Agreement, an
early termination charge ("Early Termination Charge") shall apply as
follows: The Early Termination Charge shall be an amount equal to
the lesser of (i) the aggregate monthly rate then in effect for
twelve (12) months of Service on the affected transponder(s) or (ii)
the aggregate rate for Service through the term of Service for the
affected transponder(s). Early Termination Charges 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.
22. CHANGES IN OPERATIONS OR PROCEDURES
SKYNET is not responsible to CUSTOMER if a change in operations,
procedures, or transmission parameters as set forth in Exhibit B ("TRANSMISSION
PARAMETERS") attached hereto and incorporated by reference (i) affects any
facilities, CUSTOMER equipment or CUSTOMER communications system in any way, or
(ii) requires their modification in order to be used with any transponder
provided pursuant to the Agreement. However, if such changes can be reasonably
expected to materially affect the operating or transmission characteristics of
the Service, or render with the Service 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.
23. TRANSPONDER ALLOCATION
Assignment of the specific transponders and/or satellites to be used
for the Service remains the sole prerogative of SKYNET. During the term of the
Agreement SKYNET shall
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 9 of 11
have the right to change any of the 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, such assignment change shall be made with not
less than thirty (30) days prior written notice to CUSTOMER.
24. FCC COMPLIANCE
24.1 If, at any time after the aforementioned applications become
effective, SKYNET can no longer comply fully with the provisions of
the Agreement because of other Commission rules and regulations
which are inconsistent with the Agreement, CUSTOMER may either (1)
terminate immediately the Agreement without any liability whatever
by giving notice in writing within ninety (90) days of such action
or (2) negotiate with SKYNET so to modify the Agreement as to
conform with the new commission 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.
24.2 SKYNET represents and warrants to CUSTOMER that to the best of its
knowledge there are no existing Commission rules and regulations and
no provisions in Loral SpaceCom Corporation Tariff F.C.C. No. 1 that
would prevent SKYNET from complying with all of the terms and
conditions in the Agreement. If any such Commission rules and
regulations or tariff provisions are found to exist, SKYNET agrees
that it will immediately file petitions proposing to remove such
regulations or provisions so as to permit it to comply with all of
the terms and conditions in the Agreement. If such regulations or
tariff provisions affect SKYNET's ability to comply with material
terms and conditions of the Agreement and are not removed within six
(6) months of the time petitions are filed, CUSTOMER may either (1)
terminate immediately the Agreement without any liability whatsoever
by giving notice in writing within fifteen (15) days or (2)
negotiate with SKYNET so to modify the Agreement as to conform with
the aforementioned regulations. If CUSTOMER elects to terminate in
such event, SKYNET shall refund promptly any sums previously paid to
SKYNET for Service not rendered.
24.3 SKYNET agrees that for so long as the Agreement is in effect, it
will neither voluntarily file, nor cause a third party to file
voluntarily, any proposed tariff with the Commission, and will not
voluntarily make commission filings with the Commission that are in
any way inconsistent with the terms and conditions of the Agreement.
25. NO POSSESSORY INTEREST, BANKRUPTCY
CUSTOMER has, and will have, no possessory or other interest in the
transponder(s) provided pursuant to the 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 Paragraph 21 ("EARLY TERMINATION CHARGE") hereof, are fair and
reasonable at the market on the date of commitment to the Service and the date
of the Agreement. CUSTOMER recognizes that transponder space for the provision
of the service contemplated under the Agreement is a commodity in limited supply
and that those using full time transponder service, similar to the Service
provided under the 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 the
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 the
Agreement, and to authorize the scheduled payments in full, prior to resolution
of matters affecting the Agreement.
26. INDEPENDENT CONTRACTOR
Nothing herein contained shall create any association, partnership,
joint venture, the relation of principal and agent, or the relation of employer
and employee between the parties hereto, it being understood that SKYNET shall
perform all services hereunder as an independent contractor.
27. PUBLICITY AND ADVERTISING
27.1 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 the 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
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 10 of 11
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. Notwithstanding the foregoing, 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.
27.2 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 the 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 the Agreement as
required by Law or in response to a request for information by such
Governmental Agency. Notwithstanding the foregoing, SKYNET may refer
to 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.
28. GOVERNING LAW
This Agreement shall be governed by and construed under the laws of
the State of New York, without giving effect to its conflict of law principles.
29. HEADINGS
The headings used throughout the Agreement are for convenience only
and are not a part of the Agreement and shall have no effect upon the
construction and interpretation of the Agreement.
30. WAIVERS
A waiver by either party of any of the terms and conditions of the
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.
31. CONFIDENTIALITY
The 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, or (4) to a bona fide potential
purchaser of the applicable business, investment bankers and bona fide potential
or actual lenders, provided any such party shall have agreed to keep the
Agreement confidential pursuant to an agreement containing terms substantially
similar to those in Paragraph 33 ("NONDISCLOSURE OF INFORMATION") hereof.
32. SUCCESSION
The Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties hereto.
33. NONDISCLOSURE OF INFORMATION
33.1 Each Party to the 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
project or the SKYNET network, and financial, accounting or
marketing reports, analysis, forecasts, predictions or projections
relating to this project or the business of SKYNET or CUSTOMER
generally.
33.2 It is specifically understood and agreed that Information disclosed
pursuant to the 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.
33.3 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,
LORAL SKYNET PROPRIETARY
<PAGE>
Califa / Playboy
Codicil 1 Final
2/8/99
Page 11 of 11
the disclosing party shall clearly identify it as being proprietary
at the time of disclosure, and within five (5) 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 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;
b. restrict disclosure of the Information solely to those employees
with a need to know and not disclose it to any other persons;
c. advise those employees of their obligations with respect to the
Information; and
d. use the Information only in connection with implementing the
Agreement and in continuing discussions and negotiations between the
parties concerning the Service, except as may otherwise be agreed
upon in writing.
33.4 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.
33.5 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
such order or other compulsion
33.6 The Receiving Party Agrees That All Of Its Obligations Undertaken
Under This Non-Disclosure Agreement Shall Survive And Continue After
Any 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.
34. ARBITRATION
The parties agree and acknowledge that any and all disputes,
disagreements, or controversies arising from or in connection with the Agreement
shall be submitted to arbitration. If a dispute arises out of or relates to this
Agreement, or its breach, and the parties have not been successful in resolving
such dispute through negotiation, then within thirty (30) days of such
negotiation, the parties agree to submit the dispute to final and binding
arbitration under the Rules of Conciliation and Arbitration of the American
Arbitration Association ("AAA"). Where the amount in controversy is one million
United States dollars ($1,000,000.00) or less, the arbitration will be conducted
by a sole arbitrator agreed upon by the parties. Where the amount in controversy
exceeds one million United States dollars ($1,000,000.00), the arbitration will
be conducted by a three (3) arbitrator panel, with each party selecting one (1)
arbitrator and the third being chosen by the AAA. The arbitration shall be
conducted under the procedural rules of the AAA in effect on the date of the
Agreement.. The arbitrator(s) shall apply the substantive (not the conflicts)
law of the State specified in Paragraph 28 ("GOVERNING LAW") above. The
arbitrator(s) may not limit, expand or otherwise modify the terms of the
Agreement or award exemplary or punitive damages or attorney's fees. The
arbitration, including arguments and briefs, shall be in the English language
and the arbitration shall take place in New York, 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 costs of
the arbitration. The parties, their representatives, other participants and the
arbitrator(s) shall hold the existence, content and result of the arbitration in
confidence. Nothing in this Paragraph 34 ("ARBITRATION") shall be construed to
preclude any party from seeking injunctive relief in order to protect its rights
pending 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
<PAGE>
CALIFA/PLAYBOY
2/8/99
EXHIBIT A
C-BAND PERFORMANCE PARAMETERS
TELSTAR 5
Minimum Performance At End-Of-Life With
50 State Plus U.S. Caribbean Coverage
C-BAND
EIRP
REGION 20 Watt HPA G/T
------ ----------- ---
**95% of CONUS 36.9 dBW -7
Major Alaskan Cities 33.3 dBW -8.9
Hawaii 32.2 dBW -6.3
Puerto Rico and 32.7 dBW -4.6
Virgin Islands
Should the EIRP performance of the Telstar 5 transponder vary by minus 2dBW from
the values in the above table, or if the G/T performance of the Telstar 5
transponder varies by minus 2 db/k from the values in the above table, as
measured by SKYNET at its earth station in Hawley, Pennsylvania, the transponder
will be considered to have a failure. The above table summarizes minimum (worse
case transponder during winter solstice) CW (Continuous Wave) Saturation EIRP
values at End-of-Life for the Telstar 5 C-band transponders at the Edge of
Coverage (EOC) and minimum G/T values at End-of-Life for the Telstar 5 C-band
transponders at EOC.
LORAL SKYNET PROPRIETARY
<PAGE>
CALIFA/PLAYBOY
2/8/99
EXHIBIT B
TRANSMISSION PARAMETERS
C-BAND
TRANSMISSION PARAMETERS FOR C-BAND TRANSPONDERS
A. Transmitted Carrier(s) - The transmitted carrier(s) shall be within accepted
industry standards and shall be confined to a 36 MHz bandwidth centered on the
frequency assigned by SKYNET.
B. Transmit Power - The SKYNET shall authorize a particular transmit power by a
transmitting earth station. For transponders operating in the saturated mode,
this authorized transmit power shall normally be that power necessary to
saturate the transponder and shall not be exceeded by more than 2 dB. For
transponders operating in a mode where the power is backed-off below saturation,
this authorized transmit power shall not be exceeded.
C. C-Band Carrier Dispersal - For determining the amount of carrier dispersal
required to control the energy (power flux density) at the earth's surface, a
C-Band transponders equivalent isotropically radiated power of +39 dBW for
TELSTAR 4 twelve watt transponders, +42 dBW for TELSTAR 4 twenty-four watt
transponders and +41 dBW for Telstar 5 transponders shall be assumed for beam
center-Contiguous Mainland. SKYNET transponder users are required to provide
enough modulation at all times such that the energy at the surface of the earth
from a SKYNET satellite shall not exceed the limits set by the FCC.
D. Polarization Isolation (Transmitting Earth Station) - isolation between
orthogonal cross-polarized signals shall be at least 35 dB throughout the
frequency bands of 5925 MHz to 6425 MHz within the cone angle of 0.25 Theta
where Theta is the half-power beamwidth of the main beam. The polarization
adjustment of the earth station antenna relative to the satellite shall be
maintained to an accuracy of +/- 1.0 degree at minimum Faraday rotation when
polarization tracking is not employed.
LORAL SKYNET PROPRIETARY