Document:

EXHIBIT 10.12

 

CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN
REDACTED AND SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE
SECURITIES ACT OF 1933, AS AMENDED. THE REDACTED PORTIONS ARE MARKED AS
ASTERISKS.

 

AGREEMENT
FOR THE SUBLEASE OF TRANSPONDER CAPACITY ON A

EUTELSAT SATELLITE

 

This Agreement is made and entered into force as of            /2005
by and between:

 

The Türksat Satellite Operator Company,
a corporation organized and existing under the laws of the Turkish Republic,
having its principal office at Konya Yolu 40 Km. Gölbaşı-Ankara /
TURKEY (hereinafter referred to as “TÜRKSAT”); and

 

The R.R. Satellite Communications Ltd.
a corporation organized and existing under the laws of the Israel, having its
principal office at 4 Hagoren St. Industrial Park Omer 84965, Israel
(hereinafter referred to as “the Sublessee”).

 

PREAMBLE

 

WHEREAS:

 

The Sublessee wishes to sublease a ****(1) transponder
in a satellite of the EUTELSAT Space Segment collocated at 13o East
and presently identified as Hot Bird-6 transponder number 123 ****(1)

 

Sublessee will pay to TÜRKSAT an annual amount of ****(1) EURO
and TÜRKSAT is willing to accept such sublease on the terms and conditions
hereinafter contained. (In monthly invoices of ****(1) EUROS)

 

****(1)

 

The difference between the invoices issued by the parties will be paid
by Sublessee to TÜRKSAT in equal monthly payments of ****(1) EUROS.

 

NOW IT IS HEREBY AGREED AS FOLLOWS:

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

 

ARTICLE 1          PURPOSE AND SCOPE

 

1.1   For
the purpose of this Agreement, “the Sublease Agreement” means this Agreement
and which, with its Annexes, forms an integral part of this Agreement.

 

1.2   The
purpose of this Sublease Agreement is to define the respective rights and
obligations of the parties governing the provision by TÜRKSAT of the allotted
capacity to the Sublessee.

 

1.3   TÜRKSAT
shall make the allotted Eutelsat transponder capacity available to the
Sublessee for the transmission of television programmes, subject to the
following terms and conditions.

 

1.4   For
the purposes of this agreement, the allotted Eutelsat transponder capacity
referred to in Article 1.3 shall mean the necessary capacity for
television broadcasts using transponder 123 of a Eutelsat satellite (Hot Bird-6)
at position 13° East.

 

1.5   The
transponder capacity shall be available every day for 24 hours and shall be
suitable for the transmission of one digital MCPC video platform.

 

1.6   The
technical specifications of the transponder capacity and the transmission
services which will be provided by the Sublessee are set out in Annexes which
form part of this agreement.

 

ARTICLE 2          INTERPRETATION AND
DEFINITIONS

 

Capitalized terms used and not otherwise defined herein shall have the
following meanings:

 

• “allotted
capacity’’ means the space segment capacity leased from Eutelsat by the signatory
of Turkey having the technical characteristics described in Annex A.

 

• “subleased
capacity” means the allotted capacity leased to the Sublessee by TÜRKSAT.

 

• “dedicated
satellite” means either the satellite containing the allotted capacity or, for
the purposes of the Sublease Agreement, the satellite designated by TÜRKSAT as
the satellite that will contain the subleased capacity,

 

• “permitted
services” means the services described in Annex B,

 

• “operational
period’’ means the period during which the Sublessee has the right to utilize
the subleased capacity as defined in Article 4.2,

 

• “unusable”
in relation to the allotted capacity means that such capacity has been declared
by the Sublessee to be unusable pursuant to Annex C.

 

2.2   Words
and expressions that are defined in the TÜRKSAT convention have the same
meanings in this Sublease Agreement so far as the context allows.

 

1

 

2.3   Other
words and expressions and their cognates in this Agreement have the same
meanings as they have in the Annexes.

 

2.4   The
Annexes to this Sublease Agreement are an integral part there of, the titles of
articles are not.

 

ARTICLE 3          CONDITIONS OF
SUBLEASE

 

3.1 TÜRKSAT shall sublease the space segment capacity consisting of one
****(1)  transponder of the EUTELSAT satellite (the dedicated
satellite) collocated at 13o East and presently identified as Hot
Bird-6, this transponder having the technical characteristics described in
Annex A to the Sublease Agreement.

 

3.2 As security for the performance of its obligations hereunder, the
Sublessee shall, on the execution of this Sublease Agreement, either pay to
TÜRKSAT a deposit or provide TÜRKSAT with a Bank Guarantee whose terms and
conditions shall be agreed upon by the Director General, or in such other form,
having for the purposes of security a materially identical effect in law as the
Director General, or considers will give TÜRKSAT no less security than the
Guarantee mentioned above. The amount to be paid as a deposit or Guarantee
shall be a ****(1)  in amount of ****(1)  EUROS.

 

ARTICLE 4          DURATION AND RENEWAL

 

4.1 The Sublease Agreement shall enter fully into force on the date of            2005,
an agreed date between the parties, when Turksat will cutoff the existing
carrier on Hot Bird-6  transponder number
123 and RRSAT will begin the transmission on the full transponder.

 

4.2 The operational period shall start on the date on which the
Sublease Agreement enters into force and shall end on the earlier of the
following dates:

 

4.2.1 The Sublease Agreement shall expire on November 10th
2010.

 

4.2.2 The date determined by the Eutelsat as the date when the
dedicated satellite shall be taken out of service.

 

4.3 TURKSAT and The Sublessee may amend, extend or modify This Sublease
Agreement providing the written notice to each other for the approval of such
amendment.

 

4.4 Should this Sublease Agreement be renewed or continued on a
Eutelsat satellite of a new generation, the terms and conditions of the
extended sublease will be those applicable to that satellite.

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

2

 

ARTICLE 5          TERMINATION

 

5.1 Either party may terminate this Sublease Agreement if, under the
ITU radio regulations, restrictions are imposed on the use of the subleased
capacity that significantly curtail the scope of utilizations described in
Annex B to the Sublease Agreement.

 

5.2 The Sublessee may terminate this Agreement, after completion of the
first two, three and fourth years of the Sublease, on a written notice of one
year.

 

5.3 TÜRKSAT may terminate this Agreement, if the Sublessee is in
serious breach of any of its obligations hereunder, provided however that where
the breach is capable of remedy, TÜRKSAT has first given the Sublessee notice
of the breach and the Sublessee has failed to remedy the same within such
reasonable time as is stated in the notice;

 

5.4 The right to terminate this Sublease Agreement under Articles 5.1
or 5.2 shall be the Sublessee’s sole remedy, TÜRKSAT shall not be liable for
any loss or damage (including that for direct, indirect or consequential
damages or other loss of revenue or business injury) in the case of such
termination.

 

5.5 TÜRKSAT may terminate (or suspend) this Sublease Agreement before
the end of the operational period indicated in Article 4.2 when possible
by written notice given to the Sublessee, if, after it has been given a
suitable period in which to remedy a breach of any of the terms or conditions
hereof, the Sublessee fails to do so. However, in the case of a technical
/operational emergency situation due to a breach of this Sublease Agreement by
the Sublessee, TÜRKSAT may suspend this Sublease Agreement without prior
information of the Sublessee.

 

5.6 In order to provide compensation in the event that the Sublessee
terminates this Agreement under Article 5.2 or that TÜRKSAT terminates
this agreement under Article 5.3 the Sublessee shall pay a termination fee
of a sum of 1.3 Million (1,300,000) EUROS.

 

ARTICLE 6          ASSIGNMENT

 

The Sublessee can assign this Sublease Agreement only with the prior
written approval of TÜRKSAT. This Sublease Agreement may be assigned by TÜRKSAT
to any organization that succeeds it as owner and operator of the TÜRKSAT.

 

ARTICLE 7          NOTICES

 

Notices under or in connexion with this Agreement shall be given as
follows.

 

	
  For the Sublessee

  	
  For TÜRKSAT

  
	
  Address :R.R. Sat Ltd

  4 Hagoren St Industrial Park Omer 84965

  Israel

  	
  Address: Türksat A.S.

  Konya Yolu 40.Km.

  06839 Gölbası / Ankara / TURKEY

  

 

3

 

ARTICLE 8          PAYMENTS

 

8.1 The Sublessee, subleases a ****(1) transponder
in a satellite of the EUTELSAT Space Segment collocated at 13o East
and presently identified as Hot Bird-6 transponder number 123 ****(1)

 

8.2 Both parties will issue invoices for utilization charges by the
first day of each month.

 

8.3 All payments shall cover all the amounts for the full period to
which they are related. Unless otherwise instructed by TÜRKSAT, payments should
be made to the following TÜRKSAT Bank account:

 

	
  Bank Account

  	
  : ****(1)

  
	
  Bank Name

  	
  : ****(1)

  
	
  Branch

  	
  : ****(1)

  
	
  Branch
  Code

  	
  :
  ****(1)

  
	
  Bank Address

  	
  : ****(1)

  
	
  Swift Code

  	
  : ****(1)

  

 

and will be due by ****(1).

 

8.4 Payments are deemed to have been made on the day when credit is
established in the TÜRKSAT designated bank account.

 

8.5 In the event of non payment at the due date an interest shall
automatically be charged as from the first day of delay. Such interest shall be
calculated at the annual rate of ****(1) percent.

 

ARTICLE 9          TERMINATION FOR
INTERRUPTIONS

 

9.1 Any interruption can only be considered under this Article if
it is caused by the transponder performance. Any interruption can be taken into
account in calculating the interruption periods mentioned in Article 9.2,
provided that this interruption is of at least fifteen consecutive minutes and
occurs between 18:00 CET and 01:00 CET. Should more than one interruption of at
least fifteen consecutive minutes occur in one seven hour period between 18:00
CET and 01:00 CET, these interruptions will count as one single interruption
for the purposes of calculating the interruption periods here above mentioned.

 

9.2 In the event that ten or more interruption periods as defined in Article 9.1
above should occur in any ninety day period or twenty or more interruption
periods in any year, TÜRKSAT would use reasonable endeavors to identify any
other available transponder facilities for the Sublessee.

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

4

 

9.3 The Sublessee would be entitled to terminate the Sublease Agreement
or to renegotiate its terms and conditions in the case of

 

• any
aggregate total of forty-eight hours or more of interruption periods as defined
in Article 9.1 above, occurring in any thirty day period or,

 

• Any
consecutive period of interruption of forty –eight hours or more or,

 

• Ten or
more interruption periods as defined in Article 9.1 above occurring in any
thirty day period.

 

9.4 TÜRKSAT shall not be liable for any loss or damage (including
direct, indirect of consequential damages, other loss of revenue or business
injury) incurred by the Sublessee as a consequence of its decision to terminate
the Sublease Agreement in accordance with Article 9.3

 

ARTICLE 10        LIABILITY AND
INDEMNIFICATION

 

10.1 Except as expressly provided in this Sublease Agreement, TÜRKSAT
shall not be liable for any loss or damage (including direct, indirect or
consequential damages, other loss of revenue or business injury) sustained by
the Sublessee by reason of TÜRKSAT’s inability to provide the subleased
capacity nor for any loss or damage (including direct, indirect or
consequential damages, other loss of revenue or business injury) sustained by
reason of any interruption in the availability of any such capacity or any
degradation in the technical characteristics of any such capacity, regardless
of the cause of such interruption or degradation.

 

10.2 The Sublessee shall indemnify and keep TÜRKSAT indemnified against
any loss damage liability, expense or alike arising from:

 

10.2.1 Infringement or alleged infringement of copyright or patents due
to the utilization of the subleased capacity by the Sublessee or any of its
authorized users,

 

10.2.2  Any utilization of the
subleased capacity by the Sublessee or any of its authorized users in a manner
not consistent with this Sublease Agreement or with the EUTELSAT Convention and
Operating Agreement or with any relevant national or international laws or
regulations.

 

10.2.3 All claims by third parties in any way connected with the
quality of any programme or display transmitted by the Sublessee or any of its
authorized users of the permitted services or with any failure however caused
to meet an obligation to any person to transmit any such programme or display.

 

10.3 TÜRKSAT shall promptly notify the Sublessee of any claim to which
the indemnity in Article 10.2 relates and shall make no admissions without
the Sublessee’s consent. TÜRKSAT shall allow the Sublessee, at the Sublessee’s
expense, to conduct any proceedings or settle any claims and shall give to it
all reasonable assistance in connexion with such proceedings.

 

5

 

ARTICLE 11        ****(1)

 

11.1 ****(1).

 

11.2 Whenever the subleased capacity becomes unusable TÜRKSAT shall, if
so requested by the Sublessee ****(1), but in no case shall it
incur any liability (including that for direct, indirect or consequential
damages or other loss of revenue or business injury) ****(1).

 

11.3 Where the subleased capacity has been ****(1), the
parties shall enter into a supplementary agreement for applying, with appropriate
modifications, the terms and conditions of this Sublease Agreement ****(1).

 

11.4 During any period while the subleased is unusable, the Sublessee
shall cease to have any rights in respect thereof.

 

ARTICLE 12        CREDIT FOR OUTAGES

 

Should the subleased capacity become unusable during an entertainment
television transmission as defined in ANNEX B:

 

12.1 the Sublessee shall receive credit in an amount proportionate to
the annual utilization charge in respect of each single period of 30 minutes or
more during which the subleased capacity is unusable.

 

12.2 no credit shall be given in respect of a period of less than 30
minutes, unless such period is part of a longer period of unusability that
qualifies for credit by aggregation with another such period or periods in
accordance with Article 12.3

 

12.3 periods of unusability that are of less than 30 minutes that occur
within any twenty four hour period from midnight to midnight and for which
credit has not already been given shall be aggregated and credit will be given
for the period of unusability so aggregated if the aggregate in any such hour
period exceeds one hour;

 

12.4 no allowances or credits will be made for periods of unusability
caused by the act or omission of the Sublessee or any of its employees agents
or authorized users or for periods during which measurements are being
performed under paragraph 7 of Annex A.

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

6

 

ARTICLE 13        AMENDMENTS

 

The terms and conditions of this Agreement may be amended at any time
by agreement in writing of the parties.

 

ARTICLE 14        SETTLEMENT OF
DISPUTES

 

All disputes concerning the interpretation or application of this
Sublessee Agreement that cannot be settled amicably shall be settled in
accordance with Switzerland Law, with arbitration according to the ICC
(International Chamber of Commerce) rules in Zurich, Switzerland.

 

ARTICLE 15        ENTRY INTO FORCE

 

This Sublease Agreement shall enter into force on signature by both
parties as provided in Article 4.1 and shall remain in force until the end
of the operational period; it may be extended pursuant to Article 4.3 or
otherwise.

 

 

IN WITNESS WHEREOF the undersigned, duly authorized, have signed this
Agreement in two originals of which this is one.

 

	
  TÜRKSAT
  A.S.

  	
  R.R.
  Satellite Communications Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
  (-)

  	
   

  	
  (-)

  	
   

  
	
  Signature

  	
  Signature

  
	
   

  	
   

  
	
  [                                                  ]

  	
   

  	
  David Rivel

  	
   

  
	
  Name

  	
  Name

  
	
   

  	
   

  
	
  CEO

  	
   

  	
  10/05/05

  	
   

  
	
  Title

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
  25/05/05

  	
   

  	
  CEO

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  Witness for signature

  	
  Witness for signature

  
	
   

  	
   

  
	
  (-)

  	
   

  	
  (-)

  	
   

  
	
  Signature

  	
  Signature

  
	
   

  	
   

  
	
  [                                           ]

  	
   

  	
  Gilad Ramot

  	
   

  
	
  Name

  	
  Name

  

 

7

 

	
  Chief
  Marketing Officer

  	
   

  	
  Director

  	
   

  
	
  Title

  	
  Title

  
	
   

  	
   

  
	
  25/05/05

  	
   

  	
  10/5/05

  	
   

  
	
  Date

  	
  Date

  

 

8

 

ANNEX A:

 

TECHNICAL AND OPERATING TERMS AND
CONDITIONS

 

1             INTRODUCTION

 

The purpose of this Annex is to define the technical characteristics of
the satellite transponder that will be used to provide the subleased capacity,
and the service and operating conditions that need to be observed for utilizing
the same.

 

The subleased capacity will be provided by means of ****(1) in
a satellite of the EUTELSAT Space Segment, with major technical characteristics
as defined in Table 1 to this Annex.

 

Other technical parameters, such as amplitude frequency response, AM/PM
transfer, etc. as may be necessary for a detailed system definition, can be
obtained from EUTELSAT by the help of TÜRKSAT when needed.

 

2             TECHNICAL AND OPERATIONAL
REQUIREMENTS FOR EARTH STATIONS ACCESSING THE SUBLEASED CAPACITY

 

Any earth station accessing the subleased capacity shall conform to the
technical and operational requirements specified by EUTELSAT Earth Station
Standard. Additionally, if more than one carrier is accessing the transponder
then the EIRP stability, in the direction of the satellite, of each transmit
earth station shall be ± 0.5 dB with respect to the operating EIRP, as assigned
in Transmission Plan defined in paragraph 4 below, and consequently, those
stations should have tracking facilities.

 

These requirements are necessary for ensuring an adequate level of
protection to other services carried via the EUTELSAT Space Segment as well as
to services carried via other satellite networks.

 

TÜRKSAT recognizes that it is the prerogative of the Sublessee to
establish compatibility between the earth stations accessing the subleased
capacity, and to define the service quality objectives, and the earth station
characteristics and performance necessary to achieve those objectives, beyond
those imposed by the technical and operational requirements referred to above.

 

However, TÜRKSAT needs to be provided with the service requirements and
quality objectives, as well as the receive station/equipment characteristics,
in order to ensure that the requirements and quality objectives can be met with
the resources of the subleased capacity.

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

9

 

3             APPROVAL OF EARTH STATIONS
ACCESSING THE SUBLEASED CAPACITY

 

Any earth station accessing the subleased capacity shall be approved by
TÜRKSAT prior to any access.

 

The Sublessee undertakes to operate the earth station in accordance
with the TÜRKSAT Transmission Plan and in compliance with the registered
performance characteristics of any earth station authorized to access the
subleased capacity as approved by TÜRKSAT

 

The Sublessee accepts responsibility for compliance with any national
procedure required by the Signatory(ies) - and/or any other relevant
authority(ies) - for the right to access the subleased capacity, by any earth
station having obtained the approval mentioned above and operating in
accordance with the approved Transmission Plan, from any territory from where
the transmission takes place and discharges TÜRKSAT accordingly for all and any
liability of whatever nature (including all and any direct or indirect
financial consequence) which may arise on this respect.

 

4             TRANSMISSIONS PLANS

 

The subleased capacity shall conform to the Transmission Plan approved
by TÜRKSAT, this is to ensure that:

 

i)             the levels of
interference that could be caused by the proposed transmissions and/or transmit
earth stations, to services carried via other transponders of the same
satellite and adjacent EUTELSAT satellites or via other satellite networks are
within acceptable limits;

 

ii)            The provisions of
Annex B defining the permitted services are observed.

 

Before the subleased capacity is actually utilized for transmissions,
the Sublessee shall, in order to obtain approval of TÜRKSAT, provide TÜRKSAT
well in advance (at least one month before the planned date of start of
utilization) with all relevant technical and operating parameters of the
proposed transmissions, including the earth stations that will transmit into
the subleased capacity.

 

TÜRKSAT will then issue an approved Transmission Plan which will be
provided to the Sublessee. In issuing this approved Transmission Plan TÜRKSAT
reserves the right to make any modifications to the technical and operational
parameters proposed by the Sublessee which may be necessary to meet the above
requirements i) and ii).

 

Any further change of the utilization of the subleased capacity
requested by the Sublessee shall in advance be approved by TÜRKSAT which will
issue and provide the Sublessee a new approved Transmission Plan.

 

Furthermore, in cases of a transmission of an entertainment DVB
Multiplex for direct-to-home reception, TÜRKSAT will define in the approved
Transmission Plan, the Identification Descriptors for each DVB service and the
Sublessee will strictly ensure that they are implemented in order to avoid
potential tuning conflicts for receivers and to additionally

 

10

 

harmonize the numbering scheme for all the entertainment DVB
Multiplexes for direct-to-home reception.

 

5             OPERATIONAL MANAGEMENT AND
CONTROL

 

The operational management and control of the allotted capacity shall
be in accordance with the procedures defined by EUTELSAT System Operations
Guide (ESOG).

 

6             IN-ORBIT PERFORMANCE MONITORING

 

For the purpose of verification of the subleased capacity, the
Sublessee shall permit TÜRKSAT to perform measurements which are necessary to
verify the major technical characteristics of the subleased capacity, as shown
in Table 1 contained in this Annex.

 

These measurements shall only be performed after consultation with the
Sublessee and in such a way as to avoid as far as possible interruption of the
permitted services.

 

7             SATELLITE CONTROL ETC.

 

For the purpose of monitoring, measuring and controlling the dedicated
satellite, but without adversely affecting the Sublessee’s transmissions, the
Sublessee shall permit the insertion by EUTELSAT or TÜRKSAT of signals into the
subleased capacity.

 

TABLE 1

 

The following describes the principal technical characteristics of the
subleased capacity, as defined in the Sublease Agreement:

 

TYPE OF SUBLEASE

 

	
  Satellite

  	
  Hot Bird-6

  
	
  Orbital position

  	
  13° East

  
	
  Degree of protection

  	
  ****(1)

  
	
  Down-link Frequency Band

  	
  ****(1) GHz

  

 

ORBITAL
STABILITY OF THE SATELLITE

 

The satellite providing the subleased capacity shall be maintained by
EUTELSAT within ± 0.1 degrees of
its nominal longitude position and shall be kept such that the maximum angle
between the equatorial plane and the orbital plane shall not exceed ± 0.1
degrees.

 

RECOURCES AVAILABLE TO THE SUBLESSEE

 

	
  Allocated Bandwidth

  	
  : ****(1) MHz

  

 

(1) Represents
material that has been redacted and submitted separately to the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

11

 

ANNEX B:

 

THE PERMITTED SERVICES

 

The Sublessee recognizes that the 13° East orbital position continues
to be of strategic importance for the further development of entertainment
programmes and/or applications (as such entertainment programmes and/or
applications are defined herebelow) and, in general, for the further
development of the Organization and that therefore the subleased capacity shall
be used in accordance with a number of criteria which are listed here below:

 

A) The subleased capacity may be utilized by the Sublessee or by any
other entity to which the Sublessee subleases the subleased capacity.

 

B la) the subleased capacity must be primarily used for entertainment
programmes and/or applications which consist of:

 

i) Radio or television programmes and
distribution of sound programmes and/or data channels associated with, and that
are an integral part of, any of the foregoing programmes;

ii) Multimedia service applications.

 

Entertainment programmes and/or applications are defined as any
programmes and/or applications which are intended, and are available, or
potentially available, for reception by the general public.

 

1b) the subleased capacity is deemed to be primarily used for
entertainment programmes and/or applications when during the “prime time period”,
which is defined as from 17:00 CET to 01:00 CET, at least 75% of the subleased
capacity, is exclusively used for distribution of such programmes and/or
applications, and this everyday throughout the operational period

 

B2) Any use of the subleased capacity, other than for entertainment
programmes and/or for applications as defined in Bl above, and/or for
unidirectional video transmissions and radio/TV-like programmes, shall be in
accordance with EUTELSAT and TÜRKSAT general policy for allotment agreements
and subject to the prior approval of the General Directors.

 

B3) If, in order to ensure the compliance with the provisions of this
Annex, decryption equipment that is not readily and openly available is
required by TÜRKSAT, the Sublessee shall give to TÜRKSAT all reasonable
assistance in procuring such equipment on terms and conditions to be agreed
between them.

 

B4) the Sublessee:

 

a)     shall
ensure the granting by the appropriate national telecommunications authorities
of all necessary uplink and downlink licenses and comply with all the terms and
conditions set by TÜRKSAT in this respect;

 

b)    Shall
ensure that the transponder capacity is not used in a way that contravenes
applicable national or international legislation of regulations, or in a way
which in the reasonable opinion of TÜRKSAT damages or could damage TÜRKSAT’s
good name or reputation.

 

c)     Shall
not be entitled to sublease the transponder capacity to third parties or make
it available to them on any other ground without the prior written consent of
TÜRKSAT.

 

12

 

ANNEX C:

 

PERFORMANCE
DEGRADATION

 

1- The subleased capacity shall be considered as having degraded
performance whenever there is evidence that any of the technical
characteristics defined in Annex A to this Sublease Agreement is not met and
that as a consequence, the permitted services cannot or could not be satisfactorily
provided.

 

The assessment of transponder performance shall be based on the results
of the measurements carried out on the subleased capacity in accordance with
paragraph 7 of Annex A to this Sublease Agreement.

 

As to the performance characteristics of the subleased capacity in
respect to parameters that are not included in Annex A, such characteristics
shall, where the applicable requirements specified in the satellite system
specification for those parameters are not met, be such that existing services
and modifications or additions to services can be provided without significant
degradation. In this context, the satellite system specification means the
satellite system specification for Hot Bird satellites.

 

2- The Sublessee may declare “unusable” the subleased capacity whenever
degraded performance is identified in accordance with the provisions of
paragraph 1 of this Annex, However the subleased capacity shall be considered
usable as long as the Sublessee continues to utilize it.

 

13

 

ANNEX D:

 

MINIMUM SATELLITE TRANSMISSION SPECIFICATIONS
REQUIRED FOR THE FREE-TO AIR DIGITAL TRANSMISSION ****(1)

 

1-            ****(1)

 

2-            Transmission Route:

 

2. a)         the
signals shall be downlinked from TÜRKSAT 1C. In case of problems in the signals
on Turksat 1C, the signal on Hotbird-6 shall be downlinked as back up.

 

2.
b)        ****(1).

The signals ****(1) by
satellite antennas diameters of which shall not exceed 3.5 meter.

The signals
****(1) satellite antennas diameters of which shall not exceed 1.2
meter.

 

2.
c)        ****(1).

 The signals ****(1) satellite
antennas diameters of which shall not exceed 1.2 meter.

 

2. d) Satellite
uplink and downlink parameters ****(1).
If the Sublessee wants to make a change in these parameters or the satellites
themselves listed in Annex-E, then it shall inform TÜRKSAT by written notice 2
months prior to the date of change. The changes not approved by TÜRKSAT ****(1) shall not be made by the
Sublessee. Otherwise this shall be treated by TÜRKSAT as a cause for
termination and related termination article shall be put in to effect.

 

3-            ****(1):

****(1).

 

4-

 

The minimum bit rates to be allocated to the
signals at the encoder/multiplexer of the uplink earth stations:

 

****(1)

TÜRKSAT, itself or
via a company, has the right to make measurements to control whether the
transmission is being done according to these parameters or not. As a result of
such a measurement, if it is found that transmission is not in accordance with
the parameters stated herein, TÜRKSAT shall warn The Sublessee by sending a fax message which shall be
confirmed later with a registered letter. For this purpose, all the messages to
be sent by TÜRKSAT to the address
of The Sublessee stated in this
agreement shall be treated as the messages have been received by The Sublessee. The Sublessee shall make
sure to restore the transmission in accordance with the parameters stated
herein in at most 2 (two) days after The
Sublessee is warned by the fax message. If it is faced with such a
case 3 times in a calendar year, the related termination articles of Sublease
Agreement may be put into force by TÜRKSAT.

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

14

 

5-            ****(1)

 

6-            Service Period:  The service period will start from respective
service start dates in Article 5 and will end on November 10th 2010.

 

7-            Continuity of the Service:

 

7. a) The Sublessee,
shall back up all its systems, including satellite earth stations and satellite
space capacity, with the purpose of providing the continuity of the service. In
case of a failure in these systems, the backup systems shall immediately be put
into service.

 

7. b) ****(1)

 

8-            Quality of Service: The
transmission of the signals shall be done in ****(1).

 

9-            Other
conditions:

 

9. a) ****(1).

 

9. b) ****(1).

 

9. c) ****(1).

 

9. d) ****(1).

 

9. e) In case of a
change in the technical parameters of the signals on TÜRKSAT 1C , or the
satellite itself, The Sublessee
shall make necessary changes in the downlink earth stations accordingly at its
own cost and shall provide the continuity of service. TÜRKSAT shall inform The
Sublessee about such changes in advance, subject that The Sublessee will be
able to use the same downlink equipment and antennas like before the change.

 

9. f) ****(1).

 

MINIMUM SATELLITE TRANSMISSION SPECIFICATIONS
REQUIRED FOR THE ****(1)

 

1-            ****(1).

 

2-            ****(1)

 

3-            The
Sublessee shall inform TÜRKSAT ****(1) about the ****(1).

 

4-            ****(1).

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

15

 

5-            ****(1).

 

6-            TÜRKSAT,
itself or via a company, has the right to make measurements to control whether
the transmission on Hot Bird 6 is being done according to the parameters stated
herein or not. As a result of such a measurement, if it is found that
transmission is not in accordance with the parameters stated herein, TÜRKSAT
shall warn the Sublessee by sending a fax message which shall be confirmed
later with a registered letter. For this purpose, all the messages to be sent
by TÜRKSAT to the address of the Sublessee stated in this agreement shall be
treated as the messages have been received by the Sublessee. The Sublessee
shall make sure to restore the transmission in accordance with the parameters
stated herein in at most 2(two) days after The Sublessee is warned by the fax
message. If it is faced with such a case 3 times in a calendar year, the
related termination Article 5 of the Sublease Agreement may be put into
force by TÜRKSAT.

 

7-            ****(1).

 

8-            If
the Sublessee does not perform any of its material obligations hereunder,
including but not limited ****(1).

 

9-            ****(1).

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

16

 

ANNEX E:

 

****(1)

 

	
  Satellite :

  	
  HotBird-6

  
	
  Localisation :

  	
  13° East

  
	
  Frequency :

  	
  ****(1) MHz

  
	
  Polarity :

  	
  Horizontal

  
	
  Symbol rate :

  	
  ****(1) Msb

  
	
  FEC :

  	
  ****(1)

  
	
  Transponder :

  	
  123

  
	
  Uplink station :

  	
  RRSAT

  

 

****(1):

 

	
  Satellite :

  	
  ****(1)

  
	
  Localisation :

  	
  ****(1)

  
	
  Frequency :

  	
  ****(1)

  
	
  Polarity :

  	
  ****(1)

  
	
  Symbol rate :

  	
  ****(1)

  
	
  FEC :

  	
  ****(1)

  
	
  Transponder :

  	
  ****(1)

  

 

****(1):

 

	
  Satellite :

  	
  ****(1)

  
	
  Localisation :

  	
  ****(1)

  
	
  Frequency :

  	
  ****(1)

  
	
  Polarity :

  	
  ****(1)

  
	
  Symbol rate :

  	
  ****(1)

  
	
  FEC :

  	
  ****(1)

  
	
  Transponder :

  	
  ****(1)

  

 

****(1):

 

	
  Satellite

  	
  ****(1)

  
	
  Localisation

  	
  ****(1)

  
	
  Frequency

  	
  ****(1)

  
	
  Polarity

  	
  ****(1)

  
	
  Symbol
  rate

  	
  ****(1)

  
	
  FEC

  	
  ****(1)

  
	
  Transponder

  	
  ****(1)

  

 

(1) Represents
material that has been redacted and submitted separately to the Securities and
Exchange Commission pursuant to a request for confidential treatment.

 

17Filed by Automated Filing Services Inc. (604) 609-0244 - Playbox (US) Inc.
- Exhibit 10.16

EXHIBIT 10.16

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
  THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED IN RELIANCE
  UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
  REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH SECURITIES MAY NOT
  BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
  WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
  THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
  HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
  COMPLIANCE WITH THE ACT.

REGULATION S SUBSCRIPTION AGREEMENT

THIS AGREEMENT is made effective as of the ____ 
  day of ___________. 

BETWEEN: 

  
    
      
        THE SUBSCRIBER LISTED ON THE EXECUTION PAGE TO THIS
          AGREEMENT 

        (hereinafter called the "Subscriber") 

      

    

  

OF THE FIRST PART 

AND: 

  
    
      
        Playbox (US) Inc. 

          a Nevada corporation 

        (hereinafter called the “Company") 

      

    

  

OF THE SECOND PART 

THE PARTIES HEREBY AGREE AS FOLLOWS: 

1.                  
  DEFINITIONS 

1.1                 The
  following terms will have the following meanings for all purposes of this Agreement.

	 	(a) 	 "Agreement" shall mean this Agreement, and all schedules
        and amendments to in the Agreement. 

	 	 	  

	 	(b) 	 “Common Stock” means the Common Stock of the
        Company, par value $0.001 per share. 

	 	 	  

	 	(c) 	 "Exchange Act" shall mean the United States Securities
        Exchange Act of 1934, as amended. 

	 	 	  

	 	(d) 	 “Subscriber” shall mean the Subscriber executing
        the signature page to this Agreement. 

	 	 	  

	 	(e) 	 "Offering" shall mean the offering of the Shares by
        the Company. 

	 	 	  

	 	(f) 	 “Purchase Price” means the purchase price
        payable by the Subscriber to the Company in consideration for the purchase
        and sale of the Shares in accordance with Section 2.1 of this Agreement.
      

2

	 	(g) 	 "SEC" shall mean the United States Securities and Exchange
        Commission. 

	 	 	  

	 	(h) 	 "Securities Act" shall mean the United States Securities
        Act of 1933, as amended. 

	 	 	  

	 	(i) 	 "Shares" means those Common Stock to be purchased by
        the Subscriber; 

1.2                 All
  dollar amounts referred to in this agreement are in United States funds, unless
  expressly stated otherwise. 

2.                  
  PURCHASE AND SALE OF SHARES 

2.1                 Subject
  to the terms and conditions of this Agreement, the Subscriber hereby subscribes
  for and agrees to purchase from the Company such number of Shares as is set
  forth upon the signature page hereof at a price equal to $0.25 US per Share.
  Upon execution, the subscription by the Subscriber will be irrevocable. 

2.2                 The
  Purchase Price is payable by the Subscriber contemporaneously with the execution
  and delivery of this Subscription Agreement and will be advanced to the Company
  or its solicitors. The Subscriber acknowledges that if the funds are advanced
  to the Company’s solicitors, the solicitors shall release such funds to
  the Company on confirmation by the Company that it will accept the subscription.

2.3                 Upon
  execution by the Company, the Company agrees to sell such Shares to the Subscriber
  for the Purchase Price subject to the Company's right to sell to the Subscriber
  such lesser number of Shares as it may, in its sole discretion, deem necessary
  or desirable. 

2.4                 Any
  acceptance by the Company of the Subscription is conditional upon compliance
  with all securities laws and other applicable laws of the jurisdiction in which
  the Subscriber is resident. Each Subscriber will deliver to the Company all
  other documentation, agreements, representations and requisite government forms
  required by the lawyers for the Company as required to comply with all securities
  laws and other applicable laws of the jurisdiction of the Subscriber. 

2.5                 Pending
  acceptance of this subscription by the Company, all funds paid by the Subscriber
  shall be deposited by the Company and immediately available to the Company for
  its corporate purposes. In the event the subscription is not accepted, the subscription
  funds will constitute a non-interest bearing demand loan of the Subscriber to
  the Company. 

2.6                 The
  Subscriber hereby authorizes and directs the Company to deliver the securities
  to be issued to such Subscriber pursuant to this Agreement to the Subscriber’s
  address indicated on the signature page of this Agreement. 

2.7                The
  Subscriber acknowledges and agrees that the subscription for the Shares and
  the Company's acceptance of the subscription is not subject to any minimum subscription
  for the Offering. 

3.                  
  REGULATION S AGREEMENTS OF THE SUBSCRIBER 

3.1                 The
  Subscriber represents and warrants to the Company that the Subscriber is not
  a “U.S. Person” as defined by Regulation S of the Securities Act and
  is not acquiring the Shares for the account or benefit of a U.S. Person. 

	 	 A “U.S. Person”
        is defined by Regulation S of the Act to be any person who is: 

	 	  
	  

	 	 (a) 
	 any natural person resident in the United States;
      

	 	  
	  

	 	 (b) 
	 any partnership or corporation organized or incorporated
        under the laws of the United States; 

3

	 	(c) 	 any estate of which any executor or administrator
        is a U.S. person; 

	 	 	  
	  

	 	(d) 	 any trust of which any trustee is a U.S.
        person; 

	 	 	  
	  

	 	(e) 	 any agency or branch of a foreign entity
        located in the United States; 

	 	 	  
	  

	 	(f) 	 any non-discretionary account or similar
        account (other than an estate or trust) held by a dealer or other fiduciary
        organized, incorporate, or (if an individual) resident in the United States;
        and 

	 	 	  
	  

	 	(g) 	 any partnership or corporation if:
      

	 	 	  
	  

	 		 (i) 
	 organized or incorporated under the laws of any foreign
        jurisdiction; and 

	 	 	  
	  

	 		 (ii) 
	 formed by a U.S. person principally for the purpose
        of investing in securities not registered under the Act, unless it is
        organized or incorporated, and owned, by accredited Subscribers [as defined
        in Section 230.501(a) of the Act] who are not natural persons, estates
        or trusts. 

3.2                 The
  Subscriber acknowledges that the Subscriber was not in the United States at
  the time the offer to purchase the Shares was received or at the time this Agreement
  was executed.

3.3                 The
  Subscriber acknowledges that the Shares are “restricted securities”
  within the meaning of the Securities Act and will be issued to the Subscriber
  in accordance with Regulation S of the Securities Act. The Subscriber further
  acknowledges that the Company has not agreed to register the resale of the Shares
  under the Securities Act. 

3.4                 The
  Subscriber agrees not to engage in hedging transactions with regard to the Shares
  unless in compliance with the Securities Act. 

3.5                 The
  Subscriber and the Company agree that the Company will refuse to register any
  transfer of the Shares not made in accordance with the provisions of Regulation
  S of the Securities Act, pursuant to registration under the Securities Act,
  pursuant to an available exemption from registration, or pursuant to this Agreement.

3.6                
  The Subscriber agrees to resell the Shares only in accordance with the provisions
  of Regulation S of the Securities Act, pursuant to registration under the Securities
  Act, or pursuant to an available exemption from registration pursuant to the
  Securities Act. 

3.7                 The
  Subscriber acknowledges and agrees that all certificates representing the Shares
  will be endorsed with the following legend in accordance with Regulation S of
  the Securities Act:

  
    
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
        AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
        REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
        ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
        TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
        PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN
        AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
        INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
        THE ACT”. 

    

  

4

4.                  
  REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER 

The Subscriber, represents and warrants to the Company as follows,
  and acknowledges that the Company is relying upon such covenants, representations
  and warranties in connection with the sale of the Shares to such Subscriber:

4.1                 The
  Subscriber is an investor in securities of companies in the development stage
  and acknowledges that it is able to fend for itself, can bear the economic risk
  of its investment, and has such knowledge and experience in financial or business
  matters such that it is capable of evaluating the merits and risks of the investment
  in the Shares.

4.2                 The
  Subscriber has been afforded access to information about the Company and the
  Company’s financial condition, results of operations, business, properties,
  management and prospects sufficient it to evaluate its investment in the Shares.
  The Subscriber further represents that it has had an opportunity to ask questions
  and receive answers from the directors and officers of the Company regarding
  the terms and conditions of the Offering and the business, properties, prospects
  and financial condition of the Company, each as is necessary to evaluate the
  merits and risks of investing in the Shares. The Subscriber believes it has
  received all the information it considers necessary or appropriate for deciding
  whether to purchase the Shares. The Subscriber has had full opportunity to discuss
  this information with the Subscriber’s legal and financial advisers prior
  to execution of this Agreement. 

4.3.                 The
  Subscriber acknowledges that the offering of the Shares by the Company has not
  been reviewed by the SEC and that the Shares are being issued by the Company
  pursuant to an exemption from registration under the Securities Act. 

4.4                 The
  Subscribers understands that the Shares it is purchasing are characterized as
  "restricted securities" under the Securities Act inasmuch as they are being
  acquired from the Company in a transaction not involving a public offering and
  that under such laws and applicable regulations such securities may be resold
  without registration under the Securities Act only in certain limited circumstances.
  In this connection, the Subscriber represents that it is familiar with SEC Rule
  144, as presently in effect, and understands the resale limitations imposed
  thereby and by the Securities Act. 

4.5                 The
  Shares will be acquired by the Subscriber for investment for the Subscriber's
  own account, not as a nominee or agent, and not with a view to the resale or
  distribution of any part thereof, and that the Subscriber has no present intention
  of selling, granting any participation in, or otherwise distributing the same.
  The Subscriber does not have any contract, undertaking, agreement or arrangement
  with any person to sell, transfer or grant participations to such person or
  to any third person, with respect to any of the Shares. 

4.6                 An
  investment in the Company is highly speculative and only Subscribers who can
  afford the loss of their entire investment should consider investing in the
  Company and the Shares. The Subscriber is financially able to bear the economic
  risks of an investment in the Company. 

4.7                 The
  Subscriber recognizes that the purchase of the Shares involves a high degree
  of risk in that the Company is in the early stages of development of its business
  and may require substantial funds in addition to the proceeds of this private
  placement.

4.8                 The
  Subscriber acknowledges that no market for the Shares presently exists and none
  may develop in the future and accordingly the Subscriber may not be able to
  liquidate its investment. 

4.9                 The
  Subscriber is not aware of any advertisement of the Shares. 

4.10                This
  Agreement has been duly authorized, validly executed and delivered by the Subscriber.

5

4.11               The
  Subscriber has satisfied himself or herself as to the full observance of the
  laws of his or her jurisdiction in connection with any invitation to subscribe
  for the Shares or any use of this Agreement, including (i) the legal requirements
  within his jurisdiction for the purchase of the Shares; (ii) any foreign exchange
  restrictions applicable to such purchase; (iii) any governmental or other consents
  that may need to be obtained; (iv) the income tax and other tax consequences,
  if any, that may be relevant to an investment in the Shares; and (v) any restrictions
  on transfer applicable to any disposition of the Shares imposed by the jurisdiction
  in which the Subscriber is resident. 

5.                  
  REPRESENTATIONS BY THE COMPANY 

5.1                 The
  Company represents and warrants to the Subscriber that: 

	 	(a) 	 the Company is a corporation duly organized, existing
        and in good standing under the laws of the State of Nevada and has the
        corporate power to conduct the business which it conducts and proposes
        to conduct; 

	 	 	  

	 	(b) 	 upon issue, the Shares will be duly and validly issued,
        fully paid and non- assessable common shares in the capital of the Company.
      

6.                  
  MISCELLANEOUS 

6.1                 6.1
  Any notice or other communication given hereunder shall be deemed sufficient
  if in writing and sent by registered or certified mail, return receipt requested,
  addressed to the Company, at its head office at 10480 Dattier Court, Rancho
  Cordova, California 95670 Attention: Annette Cocker, President, and to the Subscriber
  at his/her address indicated on the last page of this Subscription Agreement.
  Notices shall be deemed to have been given on the date of mailing, except notices
  of change of address, which shall be deemed to have been given when received.

6.2                 The
  parties agree to execute and deliver all such further documents, agreements
  and instruments and take such other and further action as may be necessary or
  appropriate to carry out the purposes and intent of this Subscription Agreement.

6

6.3                 This
  Agreement will be governed by and construed in accordance with the laws of the
  State of Nevada applicable to contracts made and to be performed therein. The
  parties hereby submit to personal jurisdiction in the Courts of the State of
  Nevada for the enforcement of this Agreement and waive any and all rights under
  the laws of any state to object to jurisdiction within the State of Nevada for
  the purposes of litigation to enforce this Agreement. 

IN WITNESS WHEREOF, this Subscription Agreement is executed
  as of the day and year first written above. 

	Number of Shares Subscribed For: 	Shares 
	  	  
	 	 
	SUBSCRIBER: 	  
	 	 
	Signature of Subscriber: 	  
	 	 
	Name of Subscriber: 	  
	 	 
	Address of Subscriber: 	  
	  	  
	  	  
	 	 
	 	 
	 	 
	  	  
	 	 
	ACCEPTED BY: 	  
	 	 
	Playbox (US) Inc.	  
	 	 
	Signature of Authorized Signatory: 	/s/
      Robert Burden 
	 	 
	Name of Authorized Signatory: 	Robert
      Burden
	 	 
	Position of Authorized Signatory: 	Managing
      Director
	 	 
	Date of Acceptance: 	14/07/2006

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]