Exhibit 10.11
Kohlberg Kravis Roberts & Co. L.P.
9 West 57th Street
New York, New York 10019
August 20, 2004
PanAmSat Corporation
20 Westport Road
Wilton, Connecticut
06897
Ladies and Gentlemen:
THIS LETTER SERVES TO CONFIRM THE RETENTION BY PANAMSAT CORPORATION (THE
"COMPANY") OF KOHLBERG KRAVIS ROBERTS & CO. L.P. ("KKR") TO PROVIDE MANAGEMENT,
CONSULTING AND FINANCIAL SERVICES TO THE COMPANY AND ITS DIVISIONS, SUBSIDIARIES
AND AFFILIATES (COLLECTIVELY, "PANAMSAT"), AS FOLLOWS:
1.
THE COMPANY HAS RETAINED US, AND WE HEREBY AGREE TO ACCEPT SUCH
RETENTION, TO PROVIDE TO PANAMSAT, WHEN AND IF CALLED UPON, CERTAIN MANAGEMENT,
CONSULTING AND FINANCIAL SERVICES OF THE TYPE CUSTOMARILY PERFORMED BY US.
THE
COMPANY AGREES TO PAY US AN ANNUAL FEE EQUAL TO OUR PRO RATA SHARE (AS DEFINED
BELOW) OF AN AMOUNT EQUAL TO TWO MILLION DOLLARS ($2,000,000)
(THE "ANNUAL
FEE"), SUCH FEE TO BE INCREASED AT A RATE OF 3% ANNUALLY, EFFECTIVE AS OF AUGUST
20TH OF EACH SUCH YEAR, PAYABLE IN QUARTERLY INSTALLMENTS IN ARREARS AT THE END
OF EACH CALENDAR QUARTER.
FOR PURPOSES OF THIS LETTER, THE TERM "PRO RATA
SHARE" SHALL MEAN A FRACTION, THE NUMERATOR OF WHICH IS THE AGGREGATE NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE OF THE COMPANY ("COMMON
STOCK") HELD BY AFFILIATES OF KKR AND THE DOMINATOR OF WHICH IS THE TOTAL NUMBER
OF INVESTOR SHARES OUTSTANDING AT THE TIME OF PAYMENT OF THE ANNUAL FEE.
IN
THIS AGREEMENT, THE TERM "INVESTOR SHARES" SHALL MEAN THE AGGREGATE NUMBER OF
SHARES OF COMMON STOCK HELD BY AFFILIATES OF KKR, AFFILIATES OF TC GROUP, LLC
AND AFFILIATES OF PROVIDENCE EQUITY PARTNERS IV INC.
2.
IN CONSIDERATION FOR OUR STRUCTURING SERVICES RENDERED IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENT, DATED AS OF APRIL
20, 2004, BY AND AMONG CONSTELLATION, LLC, A DELAWARE LIMITED LIABILITY COMPANY,
THE COMPANY, THE DIRECTV GROUP, INC., A DELAWARE CORPORATION, AND PAS MERGER
SUB, INC., A DELAWARE CORPORATION (THE "TRANSACTION AGREEMENT") WHICH SUCH
SERVICES INCLUDED, BUT WERE NOT LIMITED TO, FINANCIAL ADVISORY SERVICES AND
CAPITAL STRUCTURE REVIEW, THE COMPANY AGREES TO ALSO PAY A ONE-TIME TRANSACTION
FEE TO US IN A TOTAL AMOUNT EQUAL TO TWENTY-EIGHT MILLION DOLLARS
($28,000,000.00), PAYABLE IMMEDIATELY UPON THE STOCK PURCHASE CLOSING (AS
DEFINED IN THE TRANSACTION AGREEMENT).
3.
WE MAY ALSO INVOICE THE COMPANY FOR ADDITIONAL FEES IN CONNECTION WITH
ACQUISITION OR DIVESTITURE TRANSACTIONS OR IN THE EVENT THAT WE, OR ANY OF OUR
AFFILIATES, PERFORM SERVICES FOR PANAMSAT ABOVE AND BEYOND THOSE CALLED FOR BY
THIS AGREEMENT.
4.
IN ADDITION TO ANY FEES THAT MAY BE PAYABLE TO US UNDER THIS AGREEMENT,
THE COMPANY ALSO AGREES TO REIMBURSE US AND OUR AFFILIATES, FROM TIME TO TIME
UPON REQUEST, FOR ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED, INCLUDING
UNREIMBURSED EXPENSES INCURRED TO THE DATE HEREOF, IN CONNECTION WITH THIS
RETENTION AND/OR THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENT,
INCLUDING TRAVEL EXPENSES AND EXPENSES OF OUR COUNSEL.
5.
THE COMPANY AGREES TO INDEMNIFY AND HOLD US, OUR AFFILIATES (INCLUDING,
WITHOUT LIMITATION, AFFILIATED INVESTMENT ENTITIES) AND