On Utilization of the W-Band High-Frequency

Transcription

LOUISIANA BAPTIST UNIVERSITY
Abstract
ON UTILIZATION OF THE W-BAND HIGHFREQUENCY ELECTROMAGNETIC SPECTRUM
FOR CREATION OF AND DEPLOYMENT OF AN
ALTERNATIVE GLOBAL TELECOMMUNICATIONS
INFRASTRUCTURE
by William Philip Welty, M.Div.
Charles Missler, Ph.D.
Chairperson of the Supervisory Committee
A dissertation presented on the feasibility of utilizing electromagnetic spectra at 92-95 GHz
and 102-105 GHz in Band 11 of the Extremely High Frequency band described in §2.101
Nomenclature of Frequencies contained in Subpart B: Allocation, Assignment, and Use of Radio
Frequencies set forth in the Rules of the Federal Communications Commission of the United States of
America in order to design, construct, launch, deploy, and operate a Super-Wide Area
Network Satellite system to be known as SWANSAT, a constellation of high-powered
telecommunications spacecraft at geosynchronous orbit. SWANSAT is proposed as a worldwide alternative to existing terrestrially-based telecommunication infrastructures. A computernetworking business model is proposed as a necessary alternative to traditional commoncarrier (i.e., telephony-based communications systems) or broadcast (i.e., radio, television, and
other media) models. A preliminary funding model utilizing private placement memoranda to
mitigate investment risk is proposed, and a consortium of foundations is suggested to
disseminate operating profits in order to fund ministry projects on a global scale.
TABLE OF CONTENTS
CHAPTER 1: THE NEED FOR ALTERNATIVE TELECOMMUNICATIONS
TECHNOLOGIES ..................................................................................................... 1
Central Thesis of This Dissertation ............................................................................................. 1
Seamless Integration of Information Access Technologies...................................................... 2
Emerging Trends in Telecommunications.................................................................................. 3
The ITU Draft Report on IMT-2000.......................................................................................... 3
Seven Paradigm Shifts Affecting Marketing Strategies.............................................................. 5
1. From Institutionally-Directed Communication to Customer-Directed
Communication ................................................................................................................ 5
2. From Data Broadcasting to Information Narrowcasting............................................ 6
3. From Narrow Bandwidth to Broad Bandwidth............................................................ 6
4. From Fixed Systems to Wireless Systems...................................................................... 6
5. From Broadcast to Narrowcast ...................................................................................... 7
6. From Static Media to Interactive, Rich Media .............................................................. 7
7. From Static Ads to Interactive, Streaming Ads ............................................................ 7
Trends Affecting Telecommunications Hardware..................................................................... 7
A Hybrid Omnisystem of Communications Technologies....................................................... 9
Contributions to Improving Information Exchange ................................................................. 9
Ten Benefits of the SWANsat System.......................................................................................10
CHAPTER 2: INTELLECTUAL PROPERTY SET................................................. 13
A “Time-Casting” Approach to Information Usage ...............................................................14
Ubiquitous Service Potential.......................................................................................................15
Digital Telesthetics.......................................................................................................................16
Services Proposed ........................................................................................................................17
CHAPTER 3: ALTERNATIVE REGULATORY STRATEGIES ............................. 20
Toward an Alternative Regulatory Strategy...............................................................................20
SWANsat’s Shared Risk Approach to Licensing......................................................................21
The Need for Rules for Space Station Applications ................................................................23
CHAPTER 4: PROPOSED RULES FOR THE W-BAND........................................ 24
CHAPTER 5: MARKETING STRATEGIES............................................................. 53
Outsourced-based Virtual Structuring.......................................................................................53
Revenue Creation Model.............................................................................................................53
SWANsat Subscriber Account Territories................................................................................54
Account Territories and Top Level Domains...........................................................................55
SWANsat Entities........................................................................................................................61
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CHAPTER 6: SWANSAT AS A MODEL FOR CHARITABLE GIVING................. 66
Private Ownership by Charitable Trusts ...................................................................................66
Beneficiary’s Commitment to Present-Lifetime Giving ..........................................................67
Initial Advisors .............................................................................................................................67
Gifting Areas ................................................................................................................................67
Business Model for Optimizing Unused System Capacity......................................................68
CHAPTER 7: RISK FACTORS AFFECTING SWANSAT........................................ 70
General Risks................................................................................................................................70
Risks Related to New Technologies ..........................................................................................71
Risks Related to Launch and Operation....................................................................................76
Risks Related to Funding ............................................................................................................77
Risks Related to Securities Laws.................................................................................................80
Risks Related to General Economic Development .................................................................82
Risks Related to ITU Status........................................................................................................83
CHAPTER 8: VALUATION, COST, AND REVENUE ESTIMATES .................... 84
Methods for Determining Estimate of Economic Value of Operational System ................84
Evaluation Methodology: Range of Valuations........................................................................84
The Business Opportunity Represented by SWANsat............................................................85
Summary of Pre-Launch Costs...................................................................................................87
Private Placement Memorandum...............................................................................................87
CHAPTER 9: A PRACTICAL METHODOLOGY FOR CRAFTING SWANSAT... 88
Proposed Geostationary Satellite Orbital Location..................................................................89
Telemetry, Tracking, and Command .........................................................................................90
Frequency Use and Re-use..........................................................................................................91
Orbital Accuracy Proposed.........................................................................................................92
BIBLIOGRAPHY ........................................................................................................ 93
INDEX OF SUBJECTS ............................................................................................... 94
APPENDIX ONE: SPREADSHEET PRO FORMA......................... FOLLOWING 95
APPENDIX TWO:
DRAFT PRIVATE PLACEMENT MEMORANDUM .................. FOLLOWING 95
APPENDIX THREE: SWANSAT MARKETING OVERVIEW ....... FOLLOWING 95
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ACKNOWLEDGMENTS
The following contributed to the development of the SWANSAT System concept both
before and after its inception by us in 1996. Listed in alphabetical order, they include:
Howard F. Ahmanson, Jr., private entrepreneur businessman and
chairman of the Fieldstead Institute, which I helped him to organize in the
early 1980’s. He taught me the singular valuelessness of wealth, in and of
itself, to accomplish anything of lasting value unless it is first dedicated to
advancing the person and work of Jesus Christ.
Lawrence Bernstein, Esq., communications attorney and former head
trial attorney for the Federal Communications Commission. He provided
professional expertise regarding the regulatory model proposed for
SWANSAT.
Robert F. D’Ausilio, founder of IOSTAR Corporation and developer
of the power plant module for SWANSAT. His faith in our mutual dream
to craft world changing, leading edge technology ventures within the
framework of small, privately held companies led me to form SWANSAT.
Donal Edwards. He communicated the concept of digitally-delivered
television via the Direct Broadcast Service in 1986, well before
CODECing technology made DirecTV and the DISH network possible.
Wallace Linn. As a long-time veteran of the American banking, real
estate, and financial communities, he provided counsel on how to be a
faithful steward over multi-billion dollar projects.
Charles Missler, former CEO of Western Digital. He committed to
implementing a biblical worldview within the framework of leading edge
business development, serving as a valued contributor to business
strategies relating to the SWANSAT model.
Jimmy Schaeffler, founder of The Carmel Group, arguably the foremost
authority and consultancy group on the subject of DBS and convergent
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technologies in the world today. His supportive posture to SWANSAT in
its formative days encouraged us to believe the Super-Wide Area
Network should be taken seriously in the global telecommunications
arena.
Steven Schroeder, CEO of Noble Purpose, Inc.. His commitment to
faithfulness over little things as a demonstration of faithfulness over
larger things helped us craft the Themelios Charitable Remainder
Annuity Trust as the primary planned giving structure of SWANSAT.
Shannon Joy Spann, former president of Simon Greenleaf University
and Trinity Law School. Mrs. Spann encouraged me to use charitable
trusts to fund ministry projects. Her tragic loss of her husband Johnny
Micheal Spann in November 2001 as the first hostile action fatality of
Operation Enduring Freedom, America’s military response to 11 September
2001, motivated my decision to fight global Islamic terrorism.
Linda M. Vernier, who was faithful in prayer and believed in the vision.
Charles R. Welty, the writer’s twin brother. He assisted in crafting the
entities and sub-entities that are proposed to be out-sourced within the
SWANSAT model and developed the spread sheet models and a draft
private placement memorandum approach to funding SWANSAT.
A number of other individuals—and not a few corporations—could be cited as having
provided incentivization to the development of SWANSAT within the parameters of having
served as negative examples. It has been our sad experience that three basic elements
motivate the American telecommunications industry today: greed, fear, and corporate ego.
The long range goal of the SWANSAT model is to demonstrate that a fourth, more eternal,
and infinitely more important element can be applied to telecommunications by those who
possess the courage to declare their intentions to obey the exhortation of the Apostle Paul in
1 Corinthians 10:31b: Do all things to the glory of God.
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GLOSSARY
2G, 3G, etc.
Acronym for Second Generation, Third Generation, etc. This general
descriptive term delineates successive iterations of digital transmission
standards for communication of data via broadband over the internet or via
DBS. America operates its cellular telephone system using 2G, or second
generation technologies. Europe and much of the rest of the world operates
via 3G standards. Japan is experimenting with 3.5G technologies. SWANSAT,
the telecommunications system proposed by this study, will operate using 4G
standards that will not be until 2009 or later because they are under
development in cooperation with the ITU’s IMT-2000 Radio Communication
Study Groups.
BSS
Acronym for Broadcast Satellite Service. Use of telecommunications satellites
to broadcast radio or television programming from the broadcaster to the
broadcasters terrestrially-based affiliates or directly to customers.
CODEC
Acronym for COding-DECoding. The process of converting an analog video
or audio signal to a digital signal, selectively compressing repeating elements
in the converted signal through application of sophisticated mathematical
algorithms to optimize limited bandwidth.
Convergence The effect realized when telecommunications, computer networking, and
broadcast technologies are linked through the medium of common digital
protocols: the boundaries that once separated these disciplines disappear, for
all practical purposes, by virtue of the common communication protocols.
Data
Facts without time value.
DBS
Acronym for Direct Broadcast Service. Operating under Part 100 of the Rules
of the Federal Communications Commission of the United States of
America, USA-based DBS broadcasts using 284 MHz in the Ku-band at 19.2
GHz of the electromagnetic frequency spectrum. DirecTV, EchoStar’s DISH
network, and a limited number of other broadcasters are FCC-licensed DBS
operators.
Digital
Telesthetics
Telesthetics is the ability to receive information at a distance without utilizing
the traditional organs of sense. Digital Telesthetics is the utilization of
geosynchronous telecommunications spacecraft in order to facilitate
interactive reception and transmission of digital video, audio, graphics, fax,
internet, text, telephony, and other information communication products and
services, completely eliminating traditional land-based media such as
telephone wires, fiber optics, microwave, public switched networks, cellular
wireline services, or cellular non-wireline services that are dependent upon
traditional Public Switched Network (PSN) systems.
FCC
Acronym for the Federal Communications Commission, the regulatory
agency that oversees America’s telecommunications services.
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FSS
Acronym for Fixed Satellite Service. Use of telecommunications satellites to
broadcast programming or other data to and from a recipient whose receiving
unit remains at a fixed location. Contrast with MSS.
GSO
Acronym for GeoSynchronous Orbital slot. A circular orbit located
approximately 22,300 nautical miles above mean sea level on the equator. A
satellite placed at GSO will orbit the earth in 24 hours, thus appearing from
the standpoint of an observer on the earth to remain motionless with respect
to the observer. Accordingly, no complex satellite tracking system is needed
to acquire telecommunications signals broadcast from such a satellite.
Information
Data with time value added; i.e., data that has been mined and extracted from
a database in order to meet a specific need at a specific time for a specific
purpose, and then updated and recycled back to storage in the database.
ITU
Acronym for the International Telecommunication Union, the Geneva,
Switzerland-based non-profit organization that oversees coordination of
electromagnetic frequency assignments and GSO assignments to its member
nations. The ITU also undertakes telecommunications industry trend analysis,
factoring the effects of emerging technologies to its regulatory authority.
LMDS
Acronym for Local Multipoint Distribution Service. An FCC-authorized
method of distributing telecommunications services using low-powered
terrestrially based broadcasting technologies in electromagnetic frequency
spectra other than those reserved for traditional terrestrially-distributed
television or DBS services.
MSS
Acronym for Mobile Satellite Service. Use of telecommunications satellites to
broadcast programming or other data to and from a recipient whose receiving
unit is mobile. Contrast with FSS.
POTS
Acronym for Plain Old Telephone Service. A telephony industry term for
traditional dial-tone phone service.
PSN
Acronym for Public Switched Network. Terrestrially-based electronic
networks used to direct phone calls from the caller to the recipient.
SNOC
Acronym for Satellite Network Operation Center. The earth-based command
and control facility where spacecraft telemetry, tracking, and control of an
operating satellite are performed, along with broadcast programming
functions. Built and operated at a secure, remote facility and equipped with
disaster-resistant capabilities.
SWANsat
Acronym for Super-Wide Area Network Satellite. A constellation of no less
than three high-powered telecommunications satellites operating at GSO in
the W-band as a hybrid BSS, FSS, and MSS service.
W-band
That portion of the electromagnetic frequency spectrum located in Band 11
of the Extremely High Frequency (EHF) 30-300GHz band described in
§2.101 Nomenclature of Frequencies contained in Subpart B: Allocation, Assignment,
and Use of Radio Frequencies set forth in the Rules of the Federal Communications
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Commission of the United States of America. When used herein, the term “Wband” refers to spectra from 92-95 GHz and 102-105 GHz only.
VoIP
Acronym for Voice over Internet Provider. A means of converting a POTS
signal to a digital signal using a proprietary CODECing method and then
delivering the signal over the internet.
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CHAPTER 1:
THE NEED FOR ALTERNATIVE
TELECOMMUNICATIONS TECHNOLOGIES
Invention and deployment of digital CODECing technologies and ubiquitous
acceptance of the internet have gradually but inevitably melded together the broadcast,
computer networking, and telecommunications industries so thoroughly and completely
through the common medium of digital transmission protocols that the boundaries that once
separated these disciplines have been erased for all practical purposes. Today, convergence is the
watchword that defines the future of telecommunications. Digitalization of transmission
technologies characterizes the Direct Broadcast Service, the internet, internet2, fiber optic
technologies supported by cable modems, 2.5G, 3G, emerging 4G (IMT-2000+) wireless
protocols, and other technological innovations. Terrestrially-based cable companies have
added both telephone services and high speed internet services to their roster of service
offerings, and DBS operators EchoStar and DirecTV both offer satellite-delivered mediumspeed asynchronous internet services. Convergent technologies continue to merge computer,
telephone, and television hardware, and emerging technologies like LMDS continue to remove
the boundaries between traditional communications industries and protocols.
CENTRAL THESIS OF THIS DISSERTATION
The logical consequence of convergence is a skyrocketing demand for bandwidth.
Simply put, the more consumers demand information, the higher will be the demand for
technology that can deliver that information in a timely manner; i.e., when the consumer
wants information, where the consumer wants the information delivered, and in the manner
the consumer wants the information delivered. This dissertation explores how a previously
unutilized portion of the electromagnetic spectrum can be tapped in order to optimize delivery
of high-speed broadband information telecommunications services on a global scale.
Electromagnetic spectra at 92-95 GHz and 102-105 GHz in the W-Band1 are proposed in
1
This is Band 11 of the Extremely High Frequency band., described in §2.101 Nomenclature of Frequencies contained in Subpart
B: Allocation, Assignment, and Use of Radio Frequencies set forth in the Rules of the Federal Communications Commission of the United
States of America
1
order to create a Super-Wide Area Network Satellite (SWANSAT) System. SWANSAT is proposed
as a constellation of high-powered geosynchronous telecommunications satellites that could
provide exponentially better telecommunications system capability worldwide than any
currently-existing system. This dissertation proposes that the SWANSAT system utilize a
privately-held business ownership structure to create a world-wide alternative to existing
terrestrially-based telecommunication infrastructures. A computer-networking business model
is proposed as a necessary alternative to traditional common-carrier (i.e., telephony-based
communications systems) or broadcast (i.e., radio, television, and other media) models. A
preliminary funding model utilizing private placement memoranda to mitigate investment risk
is presented, and a consortium of foundations is suggested to disseminate operating profits in
order to fund ministry projects on a global scale.
SEAMLESS INTEGRATION OF INFORMATION ACCESS TECHNOLOGIES
The proposed SWANSAT system may be employed to integrate seamlessly all of the
information access bandwidth needs of a user into a single system, including telephone and fax
services (with no tariffs whatsoever for local, domestic long-distance, or international longdistance calls); VoIP-based audio teleconferencing services with a virtually unlimited number
of parties; video conferencing services at full-motion, 30 frames per second; super-high speed
internet access with greater than 1.5 Megabit/second access speeds; email with integrated free
user web pages for individuals; hundreds of educational and entertainment DBS channels;
DVD-quality video, and CD-quality audio (both commercially-sponsored and noncommercial).
When fully deployed and operational, SWANSAT could well become a single
information services wireless provider: Instead of receiving a series of monthly bills totaling
more than USD$2152 for services such as those listed above, the user may only pay about 40%
of that amount (USD$100 or less per month).
2
If basic residential telephone service costs about $30 per month, with a second dedicated fax line costing about $15 per
month, cellular service costing about $50 per month (long distance charges included), high speed DSL internet access costing
$50 per month, and reception of about 100 cable or DBS satellite channels costing about $70 per month, the total individual
end user’s information monthly information utility bill currently therefore runs no less than about $215 per month
2
EMERGING TRENDS IN TELECOMMUNICATIONS
The ITU Draft Report on IMT-2000
Continuing rapid expansion of the internet contributes to exponential changes in the
communications industries, particularly with respect to the number of businesses that maintain
a web presence, the number of people using the web, the value of e-commerce transacted on
the web, and the amount of marketing dollars spent on the web. Both the internet and
corporate intranets have quickly become significant global media in their own right, allowing
content publishers to deliver information and programming in interactive ways to a narrow
audience not possible utilizing traditional broadcast television and print media.
The ITU’s Radio Communications Study Groups have devoted much time and effort
toward tracking these emerging trends, going so far as to draft a Vision Framework and Overall
Objectives of the Future Development of IMT-2000 and of Systems Beyond IMT-2000.3 According to the
ITU’s vision statement,
by 2010 there will be 1,700 million terrestrial subscribers worldwide. It is the
envisaged that, by 2020, the whole population of the world could have access to a
mobile phone. The number of portable handsets will also exceed the number of PCs
connected to the Internet, and mobile terminals will be the major man-machine
interface of the future.4
The ITU also predicts that user needs to access multimedia data services will become the
major market influence of wireless systems.
The majority of traffic is changing from speech-oriented to multimedia
communications with a corresponding change in technology from predominantly
circuit switched to packet switched delivery. This change from second generation
technology to IMT-2000 provides the user with the ability to receive more efficient
multimedia services, including e-mail, file transfers, messaging and distribution
services. These multimedia services can be symmetrical and asymmetrical, real-time
and non real-time. For example, external market studies have predicted that in
Europe in the year 2010 more than 90 million mobile subscribers will use mobile
multimedia services, generating about 60 % of the traffic in terms of transmitted
bits. In Japan, as one of the mobile multimedia services, mobile web browsing
services have become popular in around 2000. The number of mobile web browsing
service users is 48.5 million (72 % of mobile subscribers) at the end of 2001 and is
still growing. Other communication relationships will also emerge in addition to
3
A copy of this report, dated late February 2002, labeled document 8F/ZZZ-E; ITU-R PDNR M [IMT-VIS (CG3)], is
available for download at http://swansat.com/press/index.htm.
4
ITU Vision Statement, page 5, §4, ¶1.
3
person to person, such as machine to machine, machine to person and person to
machine.5
ITU also believes that
user expectations are also continuously increasing with regard to the variety of
services and applications, many of which are expected to be highly bandwidth
consuming resulting in higher data rate requirements for the future. … In particular,
users will expect a dynamic, continuing stream of new applications, capabilities and
services. The user will also expect ubiquity and diversity of services which in some
instances may have varying economic impact. Versatile communication systems with
customized and ubiquitous services based on diverse individual needs will require
flexibility in the technology in order to satisfy these demands simultaneously.6
ITU predicts “integration of services and convergence of service delivery mechanisms”7
from what it calls a “service perspective.”8
ITU identifies three integration trends with respect to convergence delivery
mechanisms: connectivity, content, and commerce,9 but also suggests that the outworking of
these three trends
will result in new service delivery dynamics and a new paradigm in
telecommunications where value added services such as those which are location
dependent will provide enormous benefits to both the end users and the service
providers.10
Accordingly, ITU concludes that wireless radio interfaces will need to be able to carry
around 30 Mb/s by 2005. ITU’s basic analysis of emerging trends in wireless
telecommunications can be summarized by the following succinct observations:
In the future wireless service provision will be characterized by global mobile access
(terminal and personal mobility), high quality of services (full coverage, intelligible,
no drop and no/lower call blocking and latency), and easy and simple access to
multimedia services for voice, data, message, video, world-wide web, GPS, etc. via
one user terminal. End-to-end secured services will be fully coordinated, via access
control, authentication including use of biometric sensors and/or smart card and
mutual authentication, data integrity and encryption. User added encryption feature
for higher level of security will be part of the system. … The satellite and terrestrial
components may operate in conjunction with one another to facilitate global
5
Ibid., page 5, §4, ¶2.
6
Ibid., page 5, §4, ¶3.
7
Ibid., page 5, §4, ¶4.
8
Ibid.
9
Ibid., page 5, §4, ¶3.
10
Ibid., page 5, §4, ¶5.
4
coverage. The possibility to use a common terminal worldwide and to roam globally
is desirable.11
SEVEN PARADIGM SHIFTS AFFECTING MARKETING STRATEGIES
Seven emergent internet paradigm shifts are now occurring and have forever changed
the way information is disseminated. These shifts are:
From Institutionally-directed Communication to Customer-Directed
Communication
From Data Broadcasting to Information Narrowcasting
From Narrow Bandwidth to Broad Bandwidth
From Fixed Systems to Wireless Systems
From Broadcast to Narrowcast
From Static Media to Interactive, Rich Media
From Static Ads to Interactive, Streaming Ads
SWANSAT is capable of optimizing implementation of each of these trends throughout the
world in a manner more cost-effective than any other distribution systems previously
proposed.
1. From Institutionally-Directed Communication to Customer-Directed Communication
Over the past several years, individuals have been taking greater control of their
personal communication and information requirements. The internet has facilitated this shift
in behavior by providing easy electronic access to information that was once only available to
professionals at high cost. For example, with respect to investment decisions, recent changes
have made it possible for small investors with internet access and limited capital to trade stocks
and options from anywhere in the world in real time. Investors have taken advantage of these
changes, seeking to profit from short-term price movements of these securities in the medium
known as day trading. As a result, online investing accounts now total more than 60 million
accounts.
11
Ibid., page 7, §5.1, ¶4-6.
5
2. From Data Broadcasting to Information Narrowcasting
Distinguishing between data and information is foundational to the ability to provide
information services, including monitoring, consolidation, and presentation of real time
breaking news. Instead of broadcasting data to many people, SWANSAT will assist in the
dissemination of information to specific end user individuals. As a result, narrowcasting, not
broadcasting, will define the SWANSAT approach to doing telecommunications. In the proposed
model, data is defined as merely a collection of facts. Information is data with time value added.
Information is data extracted to meet a specific need at a specific time for a specific purpose. SWANSAT
will provide information, not merely data, to customers.
3. From Narrow Bandwidth to Broad Bandwidth
The means by which internet data streams are disseminated is shifting from narrow
bandwidth to broad bandwidth methodologies. Accordingly, SWANSAT will provide more
room for dissemination of broadband content after the manner of the internet2 format
recently demonstrated in the United States.12 Dissemination of educational programming,
including programming services for home and private schooling, predominates in the
preferred model. SWANSAT will encourage ubiquitous dissemination of audio/visual content,
interactive e-commerce opportunities, and internet participation by traditional advertisers.
Furthermore, adoption of broadband will encourage non-users of the internet to become
users.
4. From Fixed Systems to Wireless Systems
Except for the bandwidth limitations of traditional internet data streams (which are
being eliminated by the adoption of broadband channels), the most stringent obstacle that
hinders further expansion of internet access has been the inability of a user to access the
internet from mobile platforms. Simply put, the user has had to enter the internet from fixed
computer locations. Emerging trends within the telecommunications industry suggest that all
of this is changing, particularly in light of the nearly ubiquitous adoption of Wi-Fi mobile
technologies. Accordingly, rather than the user remaining at a fixed location to connect to the
internet world, the internet world can now come to the user wherever that user happens to be
12
See http://www.abcnews.go.com/sections/tech/CuttingEdge/Internettwo991013.html.
6
located. Through the proposed SWANSAT system, any user will be able to connect to the
internet from anywhere in the world, thus contributing to exponential growth of internet
access.
5. From Broadcast to Narrowcast
Whereas the foundational assumption of traditional television broadcasting was that
content must appeal to a wide audience, the internet’s narrowcast capability allows appeal to a
highly targeted, vertical audience. Inherent within a SWANSAT -based narrowcast approach to
market targeting is a built-in economic efficiency that makes it possible to target specific
demographic segments with a pinpoint precision simply impossible with traditional broadcast
media, without sacrificing customer privacy rights.
6. From Static Media to Interactive, Rich Media
Television broadcasting has traditionally enjoyed a significant advantage over the
internet in that its transmission content could not be effectively carried over the internet. This
is because the internet used to primarily consist of a static medium that could not efficiently
present audio or video content. Adoption of streaming video and audio technologies now
makes it possible, when combined with broad bandwidth, to present rich media content to
internet users.
7. From Static Ads to Interactive, Streaming Ads
Ads accessible on SWANSAT’s streaming media can contain full motion, full color, full
audio and visual content identical to the production standards of traditional television ads, but
directed to a pinpoint vertical audience—in some cases consisting only of a single user. While
traditional banner ads will always have some degree of continuing effectiveness on a web site,
broadening bandwidth will enable the application of interactive, streaming ad technology to its
direct response ad capabilities in order to capture market share and revenues.
Trends Affecting Telecommunications Hardware
Skyrocketing technology innovations and an exponentially expanding demand for telecommunications bandwidth clearly indicate that the time has come for someone to seamlessly
integrate all of these technologies into one ubiquitous omnisystem capable of providing user-
7
Figure 1: Computer-generated design concept for an aircraft-deployable hand-held two-way interactive mobile
earth station for use with SWANSAT.
transparent, high-capacity, interactive, on-demand telecommunications services tailored to
meet the needs of communication-intensive users.
SWANSAT could become that omnisystem. SWANSAT could accommodate creation
of a comprehensive high-capacity, ubiquitous, point-to-point, seamless integration of two-way
voice, two-way video conferencing, broadcast, narrowcast, internet services, data, fax,
computer network, entertainment video and audio programming via direct broadcast, and
retail end user sale telecommunications technologies. As a high-power (greater than 500,000
watts) geosynchronous telecommunications constellation, SWANSAT could provide video,
audio, information, text, and other services directly to, from, and between end users, bypassing
terrestrially based distribution services such as computer networks, the public switched
network (PSN), cable television outlets, computer information networks, or other distribution
systems.
8
A Hybrid Omnisystem of Communications Technologies
SWANSAT is intended to consist of a hybrid system combining the best of mobile,
broadcast, and fixed satellite services into a coherent communications system that meets the
needs of user-customers wherever they happen to be in the world. Users will be able to place
and receive telephone and fax calls, to receive and send email, to access internet services, to
receive and place two-way interactive video conferences, to operate their personal computers,
to access personal and corporate intranets, LANS, and WANS, to receive educational services,
and to access entertainment video and audio programming through SWANSAT.
SWANSAT will help meet the growing demand for telecommunications services by
offering a full range of bandwidth-on-demand services. End users will be enabled seamlessly to
integrate a variety of two-way data transmission and reception services ranging from the digital
equivalent of a 3Khz telephone line to OC-3 (155 Mbps) and above. Sophisticated signal
regeneration capability will allow for reprocessing on board the SWANSAT spacecraft of
signals received from end users antecedent to their rebroadcast back to their intended
receptors. More than 30,000,000 digital channels will be constantly available for use by end
user customers. Because of the high frequency and high broadcast power of SWANSAT,
SWANSAT will not be as susceptible to signal attenuation caused by atmospheric and
meteorological disturbances as is the case with other transmission systems that operate at
lower electromagnetic frequencies, such as the C-band, Ka-band and Ku-band.
Contributions to Improving Information Exchange
SWANSAT will add about 30 million high-speed carpool lanes to the Information
Superhighway upon commencement of its broadcast operations, assisting in the promotion of
leading edge technologies in both space and telecommunications and contributing to the flow
of information worldwide. SWANSAT will be the first and only telecommunication services
provider to open up the electromagnetic spectrum in the W-band with high-capacity, highpower two-way interactive broadcasting. It will utilize broadcast spectrum in a manner that will
multiply exponentially the efficiencies of the high frequencies requested. Use of onboard
digital signal reprocessors and digital switching systems will enable the offering of superefficient bandwidth-on-demand services.
9
SWANSAT will promote efficient use of the 92-95 GHz and 102-105 GHz portion of
the electromagnetic spectrum that have remained unused to date, meeting the growing worldwide demand for satellite services, enhancing existing uses of space communications, and
promoting development of new and innovative services. SWANSAT will operate an affordable
section of the information infrastructure, offering advanced services on a non-revenue basis to
various public, private, and home schools, to their students and their families, to their alumni
and their families, to their employees and their families, and to non-profit, tax exempt public
benefit, medical, humanitarian, scientific, religious, or educational corporations, to their
members or constituents and their families, to their employees and their families, and to their
charitable supporters and their families.
SWANSAT will provide a new telecommunications capability that will play a vital part
of the rapidly expanding telecommunications marketplace worldwide, thus equipping the
economic infrastructure of the host nation to augment its agriculturally-based economy with
an information technology-based economy. It will significantly advance the state of the art in
satellite technology. Furthermore, the proposed membership approach to telecommunications
will significantly reduce the cost of telecommunications: the cost of services can be a fraction
of that of competing satellite-based and analogous terrestrially based services.
Ten Benefits of the SWANsat System
The following ten benefits that will result in an incremental advance toward the
ongoing evolution of the global information infrastructure:
First, unlike other domestic telecommunications satellite systems, our proposed nonprofit ownership structure ensures that all after-tax operational surpluses distributed to the
charitable remainder trust-owners of SWANSAT will be utilized for charitable giving purposes,
including encouragement of wide-spread acceptance of emerging leading edge technologies
such as our proposed “Digital Telesthetics” approach to doing information. Other surpluses
will be given away for charitable purposes.
Second, SWANSAT will promote efficient use of the 92-95 GHz and 102-105 GHz
frequency bands, which have remained unused for commercial satellites to date.
Third, SWANSAT will meet the growing demand for satellite services.
10
Fourth, SWANSAT will enhance existing uses of space communications and will
promote development of new and innovative services as well.
Fifth, SWANSAT’s unique membership approach to telecommunications will result in
creation of an affordable world-wide information infrastructure because services will be
offered on a membership basis to:
Any public school, its students and their families, its alumni and their
families, and its employees and their families.
Any private school or other private educational organization, its students and
their families, its alumni and their families, its employees and their families,
and its charitable supporters and their families.
Any non-profit, tax exempt public benefit, scientific, religious, or educational
corporation, its members or constituents and their families, its employees
and their families, and its charitable supporters and their families.
Any formal or informal home school educational association or its members,
its students and their families, its alumni and their families, its employees and
their families, or its charitable supporters and their families.
By utilizing this approach to delivering telecommunications services, SWANSAT will be
enabled to provide ubiquitous twenty-four hour per day service to and from any receiver
system located anywhere within the signal area serviced by the SWANSAT spacecraft.
Sixth, SWANSAT will allow access to a plethora of educational and informational
services and free 24-hour per day use of the equivalent to a 3Khz standard residential voicegrade POTS. No charge for a line usage tariff denominated in tenth-of-a-minute increments,
minute-long increments, or hour-long increments for basic telecommunication services will be
assessed, as telcos and long distance telephone companies do. Instead, a low monthly
membership fee will be assessed. As an inducement to non-revenue grant of a formal
Application for Authorizations to operate SWANSAT, citizens of SWANSAT host nations will
enjoy non-revenue access to SWANSAT. In essence, then, nothing less than a complete
elimination of tariffs for a two-way voice grade telecommunications line denominated in
hourly, tenth-of-a-minute, or minute-long rates is possible. As a result, use of a single two-way,
11
inter-active, voice grade telecommunications line (i.e., the equivalent of a traditional 3Khz
standard residential phone service) can be provided free or essentially free.
Seventh, the SWANSAT approach to education will use portions of the
electromagnetic band that have been unused for commercial satellite services thus far. The
United States of America’s FCC expressed support for use of expanded frequency band
applications when it determined that the Norris Ka-band proposal would “encourage the
development of space and ground station technology in the Ka-band, which should result in
the development of new markets and services.” [Norris Satellite Communications, 7 FCC Rcd
4289, 4290 (1992)] SWANSAT will create those new markets and services for the 92-95 GHz
and 102-105 GHz bands as well.
Eighth, SWANSAT will provide a new telecommunications capability that will play a
vital part of the rapidly expanding telecommunications marketplace. Through SWANSAT, end
users will gain access to a range of nationwide communications services at affordable prices
and virtually on demand. Many of these services, such as high speed data sharing and
technical/medical imaging, will operate in a similar fashion to the Hughes DirecPC™ and
Expressway™ systems.
Ninth, SWANSAT will significantly advance the state of the art in satellite technology.
SWANSAT will feature such innovative advancements as on-board satellite switching and
processing, coverage, advanced ground terminal technology that allows use of extremely small
and inexpensive earth terminals, and elimination of the need for using the Public Switched
Network (PSN). SWANSAT will maximize use of its assigned spectrum.
Tenth, the SWANSAT approach to doing telecommunications will set a international
precedent that will significantly reduce the cost of telecommunications. By utilizing operational
surpluses to self-finance its replacement spacecraft, the cost of delivering services will be a
fraction of that of competing satellite-based and analogous terrestrially based services.
12
CHAPTER 2:
INTELLECTUAL PROPERTY SET
Because SWANSAT will be the first and only telecommunications service to optimize
use of the W-band (92-95 GHz and 102-105 GHz), no competition will exist at these
electromagnetic frequency bands. SWANSAT will face competition from older, more
antiquated wireless systems such as traditional cellular systems and emerging 3G technologies.
Current trends in the wireless industry support our research conclusion that it is only a matter
of time before wireless services eliminate per-minute tariffs for telephony usage and longdistance services.
Analysis of pricing trends by gozing.com, cellularphones.com, AT&T, and Cognigen
indicates that marketing and pricing trends are moving toward a fixed price for a set number
of minutes of available cellular usage. Trade magazines that report on emerging trends in the
telecommunications industry confirm these analyses.
The emerging marketing trend that provides “free” blocks of (or even unlimited access
to) weekend and evening “off-peak” minutes appears to be little more than deceptive
advertising. One must consider customer sleep habits and telephone etiquette in the
calculation: If one calculates the 9:00pm to 7:00am off-peak block of ten hours per weekday
and the weekend off-peak block of from 9:00pm Friday through 7:00am Monday as totaling
98 hours or 5,880 minutes per week, an honestly crafted marketing picture would have to
subtract no less than 56 hours (eight hours per night times seven nights per week) from the
usable off-peak hours. This leaves the end user customer with only 42 hours of usable “offpeak” hours per week.
If one calculates the high probability that the customer also will not be making calls
after 9:30pm or before 6:30am, another seven hours a week should be subtracted from the
“discretionary” time slot for making of phone calls due to telephone etiquette protocol.
Accordingly, we suggest that a typical end user will only be able to access about 35 hours of
“off-peak” hours per week. We suggest a better way to optimize use of the available
electromagnetic spectrum.
13
A “Time-Casting” Approach to Information Usage
SWANSAT will compete in the telecommunications marketplace by linking its services
to a time-casting approach to how the electromagnetic spectrum is utilized by its customers.
The proposed time-casting approach is illustrated in the following diagram that describes a
typical usage pattern for an employed individual who works week days:
Figure 1: The Information Spectrum
Three peak usages periods are delineated. In the time-cast approach to information
usage, there are no off-peak hours, only distinctions as to the intensity of information access.
During the weekday business hours, the user will have need of business productivity information to
carry out his employment responsibilities. Arguably this time period will carry the heaviest
information access requirements of the user. After work, the customer will access leisure
information to surf the internet, call friends, view pay-per-view movies, access Direct Broadcast
Satellite video and audio channels, etc. When the customer retires for the evening, the
SWANSAT information spectrum can be accessed while the customer is asleep or off line on a
discretionary information basis by other users in other time zones. (In this business example, the
employee’s weekend time falls under the leisure information access schedule.)
The time-casting approach to doing information includes the potential possibility that
an employer may opt to provide SWANSAT accounts for each of its employees, thus providing
leisure information and discretionary information access to SWANSAT as an employee benefit. Along
the way, the employer will eliminate the need to maintain many of its telecommunications
accounts. The employee’s own individual SWANSAT account will be used during the day to
access business productivity information required to carry out that employee’s responsibility. The
14
employee’s own SWANSAT account will accommodate whatever usage requirements are
needed to complete required task assignments. After work, and on week ends, the employees
SWANSAT account may be used by the employee on a leisure and/or discretionary basis.
Upon termination or retirement from his or her place of employment, the employee’s
personal SWANSAT account will be disconnected from the employer’s SWANSAT sub-net or
intranet, but will be maintained as an individual account. If or when the individual becomes
employed again, his or her SWANSAT account can be grafted into the new employer’s
SWANSAT subnet or intranet.
Ubiquitous Service Potential
SWANSAT will provide state-of-the-art two-way interactive video, audio, data, fax,
internet, educational, and conferencing services in the requested spectrum for public, private,
business, non-profit, educational, and other information dissemination purposes. SWANSAT
will facilitate creation of world-wide teleclassrooms without walls that can optimize provision
of instruction from pre-school through the graduate level in public, private, and home school
environments.
When not being utilized for educational services, SWANSAT will also accommodate
operation of traditional video and audio conferencing as well as telephony data and voice
services in the requested frequencies. SWANSAT can provide its services in digital form only,
thus effectively creating a telecommunications superhighway capable of providing video,
audio, data, and other information services at high transmission rates denominated in formats
familiar to the existing terrestrial communications infrastructure. Accordingly, SWANSAT can
provide a low-cost alternative to many existing terrestrially based services by establishing what
will essentially be a digital capacity-on-demand service.
SWANSAT can establish a true, ubiquitous, on-demand, point-to-point, seamless
integration of two-way audio, video, data, fax, DBS programming, retail end user sale and
PPV, and other services through one comprehensive system. SWANSAT can offer free twoway voice-grade service anywhere in the SWANSAT service area whether or not the recipient
of the call is another SWANSAT subscriber.
15
A unique onboard digital switching system linked to a high-powered downlink
broadcast signal will completely eliminate any need for or dependence upon terrestrial
television or radio broadcast stations, cable television service providers, public switched local
telephone service providers, long distance telephone carriers, internet service providers, cellular
telephone service providers, or other telecommunications networks. Traditional distribution
methodologies employed by the entertainment industry for motion picture viewings, sale of
video tapes or disk recordings, television and radio programming, and CD entertainment will
be vastly revolutionized by direct delivery to the end user of single play and/or single record
capability on a direct video dial tone basis.
Digital Telesthetics
The SWANSAT model calls for implementation of a proprietary Digital Telesthetics
approach to telecommunications for users. Telesthetics is “the ability to receive information at a
distance without utilizing the traditional organs of sense.” When applied to the
telecommunications industry, digital telesthetics is the utilization of geosynchronous spacecraft in
order to facilitate interactive reception and transmission of digital video, audio, graphics, fax,
internet, text, telephony, and other information communication products and services,
completely eliminating traditional land-based media such as telephone wires, fiber optics,
microwave, public switched networks, cellular wireline services, or cellular non-wireline
services that are dependent upon traditional Public Switched Network (PSN) systems.
SWANSAT will employ proprietary technology that will allow communications services
to be digitally received by and transmitted from end users directly, without using a PSN
provided by a local or long distance telephone company. A sophisticated signal processor
aboard the SWANSAT spacecraft will track transmission differentiation dynamically,
channeling signals to and from specific area spot beams. A digital telesthetics approach to doing
telecommunications will thus eliminate dependence upon sublease of a third party company’s
transmission and switching system in order to do telecommunications.
The SWANSAT digital telesthetics approach to communications will provide innovative
services throughout the world. Each spacecraft of the SWANSAT constellation will utilize an
on-board switching system and processor that will provide individual end user customers
16
immediate access to the space segment, immediately routing transmissions within the downlink
beam as needed. Because the design will avoid the use of dedicated access facilities, SWANSAT
“on demand” satellite services will be price competitive with terrestrial alternatives. As an
added benefit, end user customers will be able to enjoy access to high quality, two-way
interactive video telephony service.
SWANSAT will provide a wide variety of supplemental telecommunications
applications, including personal video telephony, high-speed personal computer access to the
internet, as well as interactive access to the wide variety of multimedia services developed for
the “information superhighway”. Electronic CD-Rom imaging, video, text, graphic, and audio
databases from magazines, encyclopedias, museum and art collections, catalog shopping stores,
etc., will be available via SWANSAT. Digital radio (with built-in conversion of frequencies to
available unused FM-stations in the customer’s geographic area) will also be offered. Other
applications and services will include video telephony and video conferencing services that will
allow multiple meeting sites and inter-connection with the end user’s video conferencing
equipment. Telecommuting hookups from home computers to school, college, university,
office, car, recreational vehicle, airplane, or boat will be possible through SWANSAT. Local
Area Network connections and intranets will also be configurable. Medical and technical teleimaging, CAD/CAM data and image transmission, and other services now being provided by
VSAT (Very Small Aperture Terminal) networks will also be provided. Incorporation of onboard satellite switching and processing technology, when combined with the digital telesthetics
approach to doing digital information, will significantly truncate the time needed to transmit
time-sensitive data.
Services Proposed
SWANSAT will meet a wide variety of communications needs, many of which are
evident today. Because the market need for high data-rate communications will continue to
grow significantly, SWANSAT is clearly warranted by the tens of millions of potential users of
services capable of being provided by SWANSAT.
Three factors contribute to the market demand for services that can be provided by
SWANSAT. These factors include:
17
First, the increase in processing power of personal computer CPU’s over the past few
years has eclipsed the capacity of high-speed communications facilities available to computer
users. Attendant with this eclipse in capacity has come a restriction of the ability of PC users to
transfer and access large files in a timely manner.
Second, the advent of affordable desktop video conferencing equipment compatible
with PC multi-media systems requires an inherently higher transmission capacity than is
currently available via terrestrially-based telecommunications media. SWANSAT will
accommodate these higher transmission capacity requirements.
Third, operators of private VSAT networks are increasingly realizing that more data
communications capacity will be needed over the next ten to twenty years than can be
accommodated by merely traditional means of telecommunications services. While it is true
that terrestrial services such as DSL, cable modems, and internet2 are being developed and
deployed, these services will not be universally available due to the cost of constructing such a
high-speed network on the ground. This shortage of service availability will be most keenly felt
in rural and remote areas, and is being felt now worldwide within isolated communities and
nations, such as Oceania and the Caribbean island nations.
SWANSAT will accommodate the needs of these market segments. SWANSAT will
market its terminals to end users through retail merchandising outlets, including land-based
and cell-based telephone companies. Because in most instances end user equipment may not
need an receiver antenna to acquire the SWANSAT spacecraft, installation procedures will be
similar to or much simpler than those employed for VSAT terminals and DBS receivers today.
End user customers may either install the systems themselves or use the services of
professional installers whose services will be made available.
Capacity on SWANSAT can be made available through sales and non-common carrier
leases. End user customers might also obtain services through private, public, and home
school education providers and/or through retail telecommunications providers such as
interexchange carriers, local exchange carriers, and competitive access providers, who will be
allowed to acquire bulk capacity and resell it in smaller units to individual users. These resellers
of telecommunications services have well-developed name recognition and local presence with
consumer and commercial customers, and are well suited to provide retail marketing of
18
SWANSAT services. Strategic alliances with other companies that are capable of maximizing
the use of non-utilized spectrum will be undertaken. For example, SkyVault Technologies has
developed a proprietary method of transmitting content that has been steganographically
encrypted within broadcast data, placing content in between used characters of a bit stream.
Also, CYVA Research Corporation has patented a proprietary method of wrapping a bit
stream within an electronic “black envelope”. CYVA’s security technology and systems
(Personal Information Agent, Trusted Network Community and Trusted Information Utility)
address core privacy and security challenges and issues facing consumers, commercial and
government entities as they employ 2.5 and 3G mobile networks, wireless computing and
telecommunications devices and infrastructures. CYVA’s applications and systems deal with
the need of service providers to protect and assert citizen informational privacy rights. They
empower a new class of trustworthy business services: Personal Information Agent (personal
identity management), Trusted Network Community (personal/community informational
privacy and informational self-determination services) and Trusted information Utility (trusted
information-for-value exchange). CYVA’s technology and systems represent a services
framework and infrastructure that can be utilized to strategically position wireless operators
and other innovative players to leverage the competitive advantages inherent within the
growing demands for legal and regulatory consumer data protections.
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CHAPTER 3:
ALTERNATIVE REGULATORY
STRATEGIES
Toward an Alternative Regulatory Strategy
Had SWANSAT been proposed for implementation within the United States of
America, the Federal Communications Commission would have maintained regulatory
oversight concerning all aspects of SWANSAT. Because only two regulatory models inform the
FCC’s approach to doing telecommunications (the broadcast model and the common carrier
model), we propose bypassing the FCC by approaching the telecommunications ministries of
selected foreign governments to create a third regulatory model: the computer networking
model. Application of a computer networking model to the regulatory framework of
SWANsat allows integration of the best features that inform both the broadcast and the
common carrier models, without hampering SWANSAT with the limitations of the broadcast
and common carrier regulatory models. However, registering SWANSAT with foreign host
countries becomes obligatory if SWANSAT is to become a business reality.
Under a broadcast regulatory model, the licensee retains ownership of all aspects of a
data transmission: the licensee owns the transmission equipment as well as the content
(programming) that is transmitted over the equipment. Under a common carrier model, the
licensee retains ownership only of the transmission equipment while the end user customer
controls the content. The end user is free under either model to own his own receiver
equipment or not to own it, at the end user’s option.
We propose the application of a computer networking model to SWANSAT. Under a
computer networking model, the licensee owns the transmission equipment and may own, but
does not necessarily own, the content transmitted. Under a computer-networking model, the
licensee may provide storage media for temporary use by its end user customers, who are
enabled to create and transmit their own programming. Under certain circumstances (such as
the SWANSAT plan to offer an option for its customers to participate as online e-journalists),
both the licensee and the end user will jointly own the transmission content.
20
SWANsat’s Shared Risk Approach to Licensing
A commitment to eliminate public auctions as a means to assign electromagnetic
frequency and/or orbital slot allocations for wireless telecommunications must be proposed.
Auctions of electromagnetic frequency assignments tend to serve as pre-business taxes, the
amount of which is unfairly set by the bidder’s competitors (who became the eventual losers of
the auction). Winners of frequency or orbital slot auctions become victims of the auction
process because their price of entry into their frequency or orbital slot is set by the winner’s
competitors, who do not become operators in that frequency or orbital slot because they lost the
auction. For governmental licensing authorities to allow this “Fox and the Grapes” approach
to frequency allocation has proven to be an unwise course of action. For example, in early
1996, a number of DBS transponder assignments at 110° West Longitude were auctioned off
by the FCC for more than US$670 million to MCI Communications. The early licensees (such
as Continental, DirecTV, EchoStar, Tempo DBS, and others) paid nothing for their permits.
This writer personally spoke on the telephone with the Chairman and CEO of
EchoStar’s DISH Network, one of the losing bidders for transponder assignments that MCI
“won” in the 1996 auction. Charlie Ergen boasted of how he had deliberately bid up the price
so that MCI would have to beat his bid in order to win, all the while privately admitting to this
writer that his company did not have the funds to pay for the assignments if his company had
won the auction. Ergen never intended to win the auction. Because each counter bid was required by
the rules of the auction to be at least five percent higher than the preceding bid, it was not long
before MCI had to bid more than $670 million to stay in the bidding. At that point, EchoStar
dropped out of the bidding and MCI “won” the auction. But then MCI proved later to be
unable to effectuate its DBS commitment. MCI left the DBS industry and declared
bankruptcy. The DBS orbital slot at 110° West Longitude was eventually taken over by
EchoStar. Meanwhile, European 3G spectrum auctions have provided hundreds of millions of
dollars in income to the licensing nations, saddling the auction “winners” with debt-service
requirements springing from the auctions that have resulted in delay after delay in bringing
their services to the public. Similar troubles have plagued the US LMDS industry.
There is a better way to undertake electromagnetic frequency and orbital allocation
assignments: a shared risk approach to frequency and orbital allocation assignments. Under the shared
21
risk approach, electromagnetic spectrum and orbital assignments are assigned on a nonrevenue (i.e., free) basis in exchange for a number of accounts that may be utilized by the
sovereign host country on a non-revenue (i.e., free) basis. In consideration of a non-revenue
(i.e., non-auction) grant of the requested authorization, SWANSAT offered to provide 100,000
separate accounts to the citizens, businesses, educational and/or religious groups, medical
relief organizations, humanitarian and/or relief organizations, other non-profit organizations,
and to the host sovereign’s government services.
The accounts include free use of full-bandwidth SWANSAT-delivered services and free
SWANSAT handsets for the life of the requested licenses and all future non-revenue grant of
license renewals. With an approximate value of USD$1,200 for each handset, the financial
commitment to the host sovereign country represents about USD$120 million with respect to
handset hardware alone, not counting the value of services that will also be provided on a nonrevenue basis annually over the twenty-five year licenses sought. An estimate of the value of
services to be provided may be set at about USD$1,200 per year for each of the 100,000 free
accounts to be provided. The total value of free services provided by in exchange for nonrevenue licensing will be about USD$120 million per year for each year of the twenty-five year
authorizations applied for, or about USD$3 billion over the twenty-five year licensure.
We proposed that allocation of the 100,000 non-revenue accounts and non-revenue
handsets be first granted to all adult citizens of the host sovereign country, with the balance of
remaining unassigned SWANSAT accounts allocated among businesses domiciled and doing
business in the territories of the host sovereign country, to educational and/or religious
groups, medical relief organizations, to other humanitarian and/or relief organizations, to
other non-profit organizations operating in its territories, and to various branches of the
government of the hosting sovereign.
We committed to work with the infrastructure of the host sovereign country to rollout
SWANSAT technology in a timely manner as it becomes available and deployable, integrating
SWANSAT services as seamlessly as possible with existing telecommunications providers. We
proposed to ensure that SWANSAT’s operational parameters, engineering design, orbital
assignments, and spectrum usages conform to all applicable regulations of the ITU current at
the time of commencement of spacecraft manufacture.
22
The Need for Rules for Space Station Applications
Even though the International Telecommunication Union, not America’s FCC, is the
international regulatory body tasked with coordinating frequency and GSO assignments,
nevertheless no telecommunications authority of any sovereign nation, including the ITU, has
yet crafted a set of regulations for space station applications and assignments in the W-band.
The W-band frequency at 92-95 GHz and at 102-105 GHz was allocated for use by
commercial FSS and MSS applications decades ago, but the aerospace technology required to
deploy a telecommunications spacecraft with enough broadcast power to utilize this spectrum
efficiently was not developed until 1997. Accordingly, no assignments had been made until
SWANSAT filed an Application for Authorizations to Operate Space Stations before the governments
of St. Kitts and Nevis, Nauru, and Tuvalu in late 2001, late 2002 and early 2003, respectively.
Because no regulatory structure had ever been crafted by any agency, including the
United States of America’s FCC, a set of Rules for Space Stations Applications in the W-Band was
crafted by us for consideration by candidate host countries. Inherent within the request for
assignments presented to the candidate host countries was a request to approve the proposed
Rules concomitant to grant of the Applications for Assignment that had been submitted. Both the
Republic of Nauru and the Government of Tuvalu agreed to do this. The Application for
Assignments that was submitted to St. Kitts and Nevis was withdrawn by SWANSAT due to
inaction by the Ministry of Telecommunications of that nation.
23
PROPOSED
CHAPTER 4:
RULES FOR THE W-BAND
Utilization of the previously allocated, but never assigned W-band for
telecommunications from geosynchronous orbit will require creation of an entirely new set of
telecommunications regulations because no regulatory authority agency anywhere on earth has
created a set of Rules for Space Station Applications in the W-BAND. Accordingly, the Rules of the
Federal Communications Commission (47 CFR) were consulted as a matrix for developing such a
set of proposed Rules for Space Station Applications in the W-Band.
Parts 25 and 100 of 47 CFR were modified to meet the unique radiocommunications
requirements of this unused portion of the electromagnetic spectrum. Specifically:
Frequency auctions were prohibited
The shared risk approach to licensing described within this dissertation was
incorporated into the regulations.
Frequency interference issues and regulations relating to international
coordination were not addressed, since the ITU’s regulatory structure
concerning these issues was deemed adequate to monitor compliance on an
international level.
Our proposed set of Rules is set forth commencing on page twenty-six. The Rules consists of
four distinct parts:
Part A discusses general issues relating to the basis and scope of the Rules, station
authorizations required, definitions, and issues related to preemption of local zoning.
Part B discusses issues relating to applications and license such as the prohibition of
competitive bidding, non-revenue authorizations, construction permits not being required,
terms and renewals of licenses, protection of proprietary information, filing of applications
Including their contents, signing, and receipt), public notice periods, dismissal and return of
applications, defective applications, oppositions, and consideration of applications.
Part C discusses issues relating to amendments, modifications, and transfers of control,
including special temporary authorizations, termination of authorizations, and reinstatement of
authorizations.
24
Part D discusses technical standards and operations, including requirements for
transmitting and Receive-only earth stations, construction certification, frequencies and
tolerances, choice of sites and frequencies, minimum angles of antenna elevations, cessation of
emissions, fixed satellite space stations, control of transmitting stations, inter-system
coordination, space communications transmissions, harmful interference, particulars of
operation, points of communication, and temporary fixed earth station operations.
Our proposed Rules for Space Station Applications in the W-Band were adopted by the
Republic of Nauru in March 2004.
25
Rules for Space Station Applications in the W-Band
Part A – General
Basis and Scope
The purpose of these Rules for Space Station Applications in the W-Band is to prescribe the
manner in which matters relating to communications by satellites using the W-band electromagnetic
frequency spectrum from 92-95 GHz and 102-105 GHz may be administered.
§01
Station Authorisation Required
No person shall use or operate apparatus for the transmission of energy or communications or
signals by space or earth stations in the W-band electromagnetic frequency spectrum from 92-95
GHz and 102-105 GHz except under, and in accordance with, an appropriate authorisation granted
by the Republic of Nauru.
§02
§03
Definitions
a) Active satellite. An earth satellite carrying a station intended to transmit or re-transmit
radiocommunication signals.
b) Allocated Bandwidth. The entry in the Table of Frequency Allocations of a given frequency
band for the purpose of its use by one or more terrestrial or space radiocommunication services
under specified conditions.
c) Authorized Carrier. A communications common carrier which is authorized to provide services
by means of communications satellites.
d) Communication Satellite Earth Station Complex. Transmitters, receivers, and communications
antennas at the earth station site together with the interconnecting terrestrial facilities (cables,
lines, or microwave facilities) and modulating and demodulating equipment necessary for
processing of traffic received from the terrestrial distribution system(s) prior to transmission via
satellite and of traffic received from the satellite prior to transfer of channels of communication
to terrestrial distribution system(s).
e) Communication Satellite Earth Station Complex Functions. The communication-satellite earth
station complex interconnects with terminal equipment of common carriers or authorized
entities at the interface; accepts traffic from such entities at the interface, processes for
transmission via satellite and performs the transmission function; receives traffic from a satellite
or satellites, processes it in a form necessary to deliver channels of communication to terrestrial
common carriers or such other authorized entities and delivers the processed traffic to such
entities at the interface.
f) Communications Common Carrier. Any entity engaged as a common carrier for hire, in
communication by wire or radio or in radio transmission of energy, and entity which owns or
controls, directly or indirectly, or is under direct or indirect common control with, any such
carrier.
26
§03 Definitions
§03 Definitions
g) Earth station. A station located either on the Earth's surface or within the major portion of the
Earth's atmosphere intended for communication with one or more space stations or with one or
more stations of the same kind by means of one or more satellites.
h) Fixed earth station. An earth station intended to be used at a specified fixed point.
i) Fixed-Satellite Service. A radiocommunication service between earth stations at given positions,
when one or more satellites are used; the given position may be a specified fixed point or any
fixed point within specified areas; in some cases this service includes satellite-to- satellite links,
which may also be operated in the inter-satellite service; the fixed-satellite service may also
include feeder links of other space radiocommunication services.
j) Frequency Assignment. The authorisation given by the Republic of Nauru to use a radio
frequency or radio frequency channel under specified conditions.
k) Geostationary satellite. A geosynchronous satellite whose circular and direct orbit lies in the
plane of the Earth's equator and which thus remains fixed relative to the Earth.
l) Mobile earth station. An earth station intended to be used while in motion or during halts at
unspecified points.
m) Mobile-Satellite Service. A radiocommunication service between mobile earth stations and one
or more space stations, between space stations used by this service, or between mobile earth
stations, by means of one or more space stations, including feeder links necessary for its
operation.
n) Satellite Digital Audio Radio Service (“DARS”). A radiocommunication service in which audio
programming is digitally transmitted by one or more space stations directly to fixed, mobile,
and/or portable stations, and which may involve complementary repeating terrestrial
transmitters, telemetry, tracking and control facilities.
o) Satellite Service. A radiocommunication service in which signals transmitted or retransmitted by
space stations are intended for direct reception by the general public, whether such reception
encompasses individual reception and/or community reception.
p) Satellite System. A space system using one or more artificial satellites.
q) Service Provider. Any licensee who operates a Satellite Service pursuant to these Rules for Space
Station Applications in the W-Band.
r) Spacecraft. A man-made vehicle which is intended to go beyond the major portion of the
Earth's atmosphere.
s) Space operation service. A radiocommunication service concerned exclusively with the operation
of spacecraft, in particular space tracking, space telemetry and space telecommand. These
functions will normally be provided within the service in which the space station is operating.
t) Space radiocommunication. Any radiocommunication involving the use of one or more space
stations.
27
§04 Preemption of Local Zoning
§05 Competitive Bidding Prohibited
u) Space station. A station located on an object which is beyond, is intended to go beyond, or has
been beyond, the major portion of the Earth's atmosphere.
v) Space system. Any group of cooperating earth stations and/or space stations employing space
radiocommunication for specific purposes.
w) Space telecommand. The use of radiocommunication for the transmission of signals to a space
station to initiate, modify or terminate function of the equipment on a space object, including
the space station itself.
x) Space telemetering. The use of telemetering for the transmission from a space station of results
of measurements made in a spacecraft, including those relating to the functioning of the
spacecraft.
y) Space tracking. Determination of the orbit, velocity or instantaneous position of an object in
space by means of radiodetermination for the purpose of following its movement.
§04
Preemption of Local Zoning
a) Any local zoning, land-use, building, or similar regulation that materially limits transmission or
reception by satellite earth station antennas, or imposes more than minimal costs on users of
such antennas, is preempted unless the promulgating authority can demonstrate that such
regulation:
1) Has a clearly defined health, safety, or aesthetic objective that is stated in the text of the
regulation itself; and
2) Furthers the stated health, safety or aesthetic objective without unnecessarily burdening
access to satellite services and in promoting fair and effective competition among competing
communications service providers.
b) Any local zoning, land-use, building, or similar regulation that affects the installation,
maintenance, or use of a satellite earth station antenna that is two meters or less in diameter and
is located or proposed to be located in any area where commercial or industrial uses are generally
permitted shall be presumed unreasonable and is therefore preempted.
Part B – Applications and Licenses
§05
Competitive Bidding Prohibited
a) No application for operations in the W-band shall be subject to competitive bidding procedures
or auctions for any of the following:
1) Assignment of electromagnetic frequencies,
2) Assignment of orbital allocations,
3) Launch authorisations (including authorisations for launch of on-orbit spare satellites), or
28
§06 Non-Revenue Authorisations
§06 Non-Revenue Authorisations
4) Licenses to operate a space station, or
5) Licenses for operation by a service provider’s end user customers of earth stations that
utilize radiocommunication services provided by a space station authorized to operate in the
W-band.
6) Licenses to operate beyond the borders of the Republic of Nauru.
§06
Non-Revenue Authorisations
a) Applications for authorisation in the W-band may be granted on a non-revenue basis for:
1) Assignments to use of specific electromagnetic frequencies,
2) Assignments to use of specific geosynchronous orbital slots,
3) Launch authorisations, including launch authorisations for delivery to storing orbits,
4) Licenses to operate space stations,
5) Licenses on behalf of the applicant’s customers to operate bi-directional mobile earth
stations,
6) Licenses to operate beyond the borders of the Republic of Nauru, provided that applicants
shall remain compliant with the broadcasting regulations of all nations whose territories lie
beyond the borders of the Republic of Nauru to the extent that these broadcasting
regulations do not conflict with these Rules for Space Station Applications in the WBand.
b) Applications for authorisation shall be granted on a non-revenue basis if and only if the
applicant agrees to provide non-revenue use of its services for the life of the requested licenses
and all future license renewals thereto for no less than 100,000 separate end user customer
accounts which shall be provided only to and for the exclusive use:
1) Natural-born or naturalized citizens of the Republic of Nauru,
2) Businesses based in the Republic of Nauru,
3) Educational groups, religious groups, medical relief organizations, other humanitarian
and/or relief organizations, and other non-profit organizations based in the Republic of
Nauru, and
4) The various branches of government of the Republic of Nauru.
c) If the applicant agrees to provide non-revenue use of its services for the life of the requested
licenses and all future license renewals thereto for the end user customer accounts described in
Paragraph B, above, then operational licenses and/or authorisations shall be exempted from
taxation or other monetary levies by the Republic of Nauru, including, but not limited to
exemption from national, regional, local, or municipal user fees, taxes, or other tariffs of any
kind for the life of the requested authorizations and for all renewals thereof.
29
§07 Construction Permits Not Required
§07
§08 Licenses, Terms, and Renewals
Construction Permits Not Required
a) Construction permits shall not be required:
1) For space stations intended to operate under a license issued pursuant to these Rules for
Space Station Applications in the W-Band; or
2) For satellite earth stations intended to operate with licensed space stations under these
Rules for Space Station Applications in the W-Band.
b) An applicant for license authorisations may proceed with construction of its space stations or
earth stations at its own risk prior to grant of a license if the applicant notifies the Republic of
Nauru of its plan to begin construction at its own risk, provided, however, that the Republic of
Nauru shall be held liable by an applicant for losses sustained by an applicant that proceeds to
construct at its own risk by reason of the denial of any such application filed under these Rules
for Space Station Applications in the W-Band.
c) All entities granted authorisations under these Rules for Space Station Applications in the WBand shall proceed with due diligence in construction, unless otherwise determined by the
Republic of Nauru upon proper showing in any particular case.
§08
Licenses, Terms, and Renewals
a) Authorisation for operation of a space station in the W-band shall not be granted in the
frequency band 92-93 GHz or 102-105 GHZ for operation with a transponder wattage of less
than 100,000 watts.
b) A launch authorization shall be applied for and granted before a space station may be launched
and operated in orbit.
1) A request for operational electromagnetic frequencies and assignment to specific
geosynchronous orbital slots may be included in an application for space station license.
2) A request for launch authorisation may be included in an application for space station
license.
3) A request for launch authorisation for an in-orbit spare may be included in an application for
space station license.
4) An application for authority to launch and operate an on-orbit spare satellite may be
included in an application for a space station license.
5) Simultaneous application for a station license may be made for all earth station facilities
governed by this part at the same time an application for launch authorisation and license to
operate a space station is filed. In those cases where an applicant is filing a number of
essentially similar applications, showings of a general nature applicable to all of the proposed
stations may be submitted in the initial application and incorporated by reference in
subsequent applications.
30
§09 Protection of Proprietary Information
§09 Protection of Proprietary Information
c) Licenses for both broadcast and non-broadcast facilities governed by these Rules for Space
Station Applications in the W-Band shall be issued for a period of twenty-five (25) years.
1) The Republic of Nauru may grant or renew station licenses for less than 25 years if, in its
judgment, the public interest, convenience and necessity will be served by such action.
2) The license term will begin at 12:00 a.m. Greenwich Mean Time (GMT) on the date the
licensee certifies to the Republic of Nauru that the satellite has been successfully placed into
orbit and that the operations of the satellite fully conform to the terms and conditions of the
space station radio authorisation.
3) All space stations launched and brought into service during the license term shall operate
pursuant to the system authorisation, and the operating authority for all space stations will
terminate upon the expiration of the system license.
d) Applications for renewals of earth station licenses shall be submitted no earlier than 180 days,
and no later than 90 days, before the expiration date of the license. Applications for space
station system replacement authorisation for non-geostationary orbit satellites shall be filed no
earlier than 180 days, and no later than 90 days, prior to the end of the final year of the existing
license term.
e) Permittees shall place their space stations into operation within ten years of the grant of a license
authorisation.
f) An applicant found to be qualified may be initially assigned up to three orbital locations (plus a
fourth sparing orbital location) for each frequency band proposed.
§09
Protection of Proprietary Information
a) Any applicant may request that the Republic of Nauru protect from public disclosure certain
information that is deemed by the applicant to be proprietary, including, but not limited to:
1) Specific details concerning costs of design, construction, and launch of space stations
applied for under these rules.
2) Specific details concerning engineering plans, designs, models, or other specifications that
are proprietary to the applicant or to its vendors.
3) Any information that, were it to be disclosed to third parties, might lead to a restraint of
trade, unfair competition against the applicant, or appropriation of an applicant’s proprietary
technology.
b) Information deemed by the applicant to be proprietary shall be identified by the applicant as
being PROPRIETARY INFORMATION SUBJECT TO NON-DISCLOSURE
PROTECTION and placed in a separate exhibit to any application filed under these Rules for
Space Station Applications in the W-Band.
c) No exhibit to an application filed pursuant to these Rules for Space Station Applications in the WBand that bears an indicia claiming to be PROPRIETARY INFORMATION SUBJECT TO
31
§10 Filing of Applications, Number of Copies
§11 Contents of Applications
NON-DISCLOSURE PROTECTION shall be placed in any public inspection file or otherwise
released to any party other than authorized agents of the Republic of Nauru without the
expressed, written authorization of the applicant who claims that such information is subject to
non-disclosure protection.
§10
Filing of Applications, Number of Copies
a) The original application and five copies thereof shall be filed with the Republic of Nauru. Each
copy shall bear the dates and signatures that appear on the original and shall be complete in
itself.
b) All applications shall be on paper 8 by 11½ inches with left hand margin not less than 1½
inches wide. The impression shall be on one side of the paper only and shall be double spaced.
All applications and accompanying papers, except charts, shall be typewritten or prepared by
mechanical processing methods. All copies must be clearly legible.
c) The Republic of Nauru may request from any party at any time additional information
concerning any application, or any other submission or pleading regarding an application, filed
under this part.
d) Applicants, permittees and licensees shall provide the Republic of Nauru with all information it
requires for the advance publication, coordination and notification of international frequency
assignments. No protection from interference caused by radio stations authorized by other
Administrations is guaranteed unless coordination procedures are timely completed or, with
respect to individual administrations, by successfully completing coordination agreements. Any
radio station authorisation for which coordination has not been completed may be subject to
additional terms and conditions as required to effect coordination of the frequency assignments
with other Administrations.
§11
Contents of Applications
a) Each application shall contain full and complete disclosures with regard to the real party or
parties in interest and as to all matters and things required to be disclosed in the application.
1) A comprehensive proposal shall be submitted for each proposed space station, together
along with attached exhibits as described in this section. If an applicant is proposing more
than one space station, information common to all space stations may be submitted in a
consolidated system proposal.
2) Each application for a new or modified space station authorisation must constitute a
concrete proposal for Republic of Nauru evaluation, although the applicant may propose
alternatives that increase flexibility in accommodating the satellite in orbit.
3) The technical information for a proposed satellite system need not be filed on any prescribed
form but should be complete in all pertinent details.
32
4) General description of overall system facilities, operations and services, including a showing
describing the type of service that will be provided, the technology that will be employed,
and all other pertinent information.
5) Type of authorisation requested (e.g., launch authority, station license, modification of
authorisation);
b) If applicant is a corporation, the following general information in narrative form shall be
contained in each application:
1) The name, address, telephone number, fax number, and email address (if an email address is
maintained) of the applicant.
2) Place of incorporation.
3) Names and addresses of directors and principal officers of applicant and percentage of stock
of applicant owned by each.
4) Name, address, telephone number, fax number, and email address (if an email address is
maintained) of the person(s), including counsel, to whom inquiries or correspondence
should be directed.
c) If applicant is an individual or business organization other than a corporation, the following
general information in narrative form shall be contained in each application:
1) The name, address, telephone number, fax number, and email address (if an email address is
maintained) of the applicant.
2) Name and address of each person having a financial interest in the entity and a description
of the nature and extent of such interest.
3) Name, address, telephone number, fax number, and email address (if an email address is
maintained) of the person(s), including counsel, to whom inquiries or correspondence
should be directed.
d) The following additional information in narrative form shall be contained in each application:
1) Detailed information demonstrating the financial qualifications of the applicant to construct
and launch the proposed satellites.
2) A clear and detailed statement of whether the space station is to be operated on a common
carrier basis, or whether non-common carrier transactions are proposed. If non-common
carrier transactions are proposed, describe the nature of the transactions and specify the
number of transponders to be offered on a non-common carrier basis;
3) Dates by which construction will be commenced and completed, launch date, and estimated
date of placement into service;
33
4) Public interest considerations in support of grant in the form of a statement why the
applicant believes a grant of its application will be consistent with the public interest,
convenience, and necessity.
5) A certification statement that it is legally, financially, technically, and otherwise qualified to
proceed expeditiously with the construction, launch and/or operation of each proposed
space station facility immediately upon grant of the requested authorisation.
6) The estimated costs of proposed construction and/or launch, and any other initial expenses
for the space station(s).
7) Estimated operating expenses for one year after launch of the proposed space station(s).
8) Whatever other information or details the Republic of Nauru may require with regard to a
specific application or applicant.
e) The following technical information in narrative form shall be contained in each application or
submitted within 120 days of approval of requested orbital assignments and electromagnetic
frequency allocations:
1) Radio frequencies and polarization plan (including beacon, telemetry, and telecommand
functions), center frequency and polarization of transponders (both receiving and
transmitting frequencies), emission designators and allocated bandwidth of emission, final
amplifier output power (identify any net losses between output of final amplifier and input
of antenna and specify the maximum EIRP for each antenna beam), identification of which
antenna beams are connected or switchable to each transponder and TT&C function,
receiving system noise temperature, the relationship between satellite receive antenna gain
pattern and gain-to-temperature ratio and saturation flux density for each antenna beam
(may be indicated on antenna gain plot), the gain of each transponder channel (between
output of receiving antenna and input of transmitting antenna) including any adjustable gain
step capabilities, and predicted receiver and transmitter channel filter response
characteristics;
2) Applications for satellites that are intended to be placed in geostationary orbit shall include
information on orbital location, or locations if alternatives are proposed, requested for the
satellite, the factors that support such an orbital assignment, the range of orbital locations
from which adequate service can be provided and the basis for determining that range of
orbital locations, and a detailed explanation of all factors that would limit the orbital arc over
which the satellite could adequately serve its expected users;
3) Predicted space station antenna gain contour(s) for each transmit and each receive antenna
beam and nominal orbital location requested. These contour(s) should be plotted on an area
map at 2 Db intervals down to 10 dB below the peak value of the parameter and at 5 dB
intervals between 10 dB and 20 dB below the peak values, with the peak value and sense of
polarization clearly specified on each plotted contour;
4) A description of the types of services to be provided, and the areas to be served, including a
description of the transmission characteristics and performance objectives for each type of
34
§12 Signing of Applications
§12 Signing of Applications
proposed service, details of the link noise budget, typical or baseline earth station
parameters, modulation parameters, and overall link performance analysis (including an
analysis of the effects of each contributing noise and interference source);
5) For satellites in geostationary-satellite orbit, accuracy with which the orbital inclination, the
antenna axis attitude, and longitudinal drift will be maintained;
6) Calculation of power flux density levels within each coverage area and of the energy
dispersal, if any;
7) Arrangement for tracking, telemetry, and control;
8) Physical characteristics of the space station including weight and dimensions of spacecraft,
detailed mass (on ground and in-orbit) and power (beginning and end of life) budgets, and
estimated operational lifetime and reliability of the space station and the basis for that
estimate;
9) An interference analysis to demonstrate the compatibility of its proposed system 2 degrees
from any authorized space station. An applicant should provide details of its proposed RF
carriers which it believes should be taken into account in this analysis. At a minimum, the
applicant must include, for each type of RF carrier, the link noise budget, modulation
parameters, and overall link performance analysis.
f) Applicants may request specific frequencies and orbital positions. The Republic of Nauru shall
generally consider all frequencies and orbital positions to be of equal value, and conflicting
requests for frequencies and orbital positions will not necessarily give rise to comparative
hearing rights as long as unassigned frequencies and orbital slots remain.
g) Because technical information required to be submitted by the applicant pursuant to sub-section
(e) of this section of these Rules for Space Station Applications in the W-Band may be
dependent upon grant of specific orbital assignments and electromagnetic frequency
assignments, an applicant may delay providing the technical information required by this section
of these Rules for Space Station Applications in the W-Band until 120 days following award
of specific orbital assignments and electromagnetic frequency assignments.
§12
Signing of Applications
a) The original copy of the application and any future amendments filed shall be personally signed
by the applicant, if the applicant is an individual; by one of the partners, if the applicant is a
partnership; by an officer if the applicant is a corporation; or by a member who is an officer, if
the applicant is an unincorporated association.
b) Applications and amendments thereto need not be signed under oath; however, willful false
statements made therein are punishable by refusal or revocation of authorization or by dismissal
of the application.
35
§13 Receipt of Applications
§14 Public Notice Period
Receipt of Applications
Applications received by the Republic of Nauru shall be given a file number for administrative
convenience. Neither the assignment of a file number nor the placement of the application on
public notice as received for filing shall be interpreted that the application has been found acceptable
for filing or precludes the subsequent return or dismissal of the application if it is found to be
defective or not in accordance with the Republic of Nauru's rules.
§13
§14
Public Notice Period
a) Each application for a direct broadcast satellite system shall be placed on public notice for 10
days, during which time interested parties may file comments and petitions related to the
application.
1) No application filed will be granted by the Republic of Nauru earlier than 10 days following
issuance of public notice by the Republic of Nauru of the acceptance for filing of such
application or any substantial amendment thereto.
2) No application that has appeared on public notice shall be granted until the expiration of a
period of ten days following the issuance of the public notice listing the application, or any
major amendment thereto.
3) Any comments or petitions shall be delivered to the Republic of Nauru by that date.
4) Any interested party may file comments with respect to the application (or amendment
thereto) within this 10-day period. Such comments must also be served on the applicant who
shall be afforded 10 additional days in which to file reply comments.
5) If upon examination of any such application (or amendment thereto) together with any
comments filed with respect thereto the Republic of Nauru is unable to make a finding that
a grant of authorisation will be consistent with the public interest, convenience, and
necessity, it will deny the application or institute such further proceedings as in its discretion
appear appropriate.
b) Applications submitted for consideration under these Rules for Space Station Applications in
the W-Band shall be considered on a first-come, first-served basis. Additional competing
applications shall be considered only after applications that have been previously filed have been
considered and acted upon by the Republic of Nauru.
c) After the public comment period and staff review, each application for a direct broadcast
satellite system shall be acted upon by the Republic of Nauru in the order received to determine
if authorisation of the proposed system is in the public interest. Because applications shall be
considered on a first-come, first-served basis, the fact that a competing application may have
been filed before the Republic of Nauru shall not be considered as a valid reason for the
rejection of a previously filed application.
d) A public notice need not and will not normally be issued for receipt of any of the following
applications:
36
§15 Dismissal and Return of Applications
§16 Defective Applications
1) For authorisation of a minor technical change in the facilities of an authorized station;
2) For temporary authorisations;
3) For consent to an involuntary assignment or transfer of control;
4) For consent to an assignment or transfer of control of a space station authorisation or a
transmitting earth station authorisation, where the assignment or transfer does not involve a
substantial change in ownership or control.
§15
Dismissal and Return of Applications
a) Any application may be dismissed without prejudice as a matter of right if the applicant requests
its dismissal prior to final Republic of Nauru action.
b) The Republic of Nauru will dismiss an application for failure to prosecute or for failure to
respond substantially within a specified time period to official correspondence or requests for
additional information.
§16
Defective Applications
a) Applications not in accordance with these Rules for Space Station Applications in the WBand may be deemed defective and returned by the Republic of Nauru.
1) Notices that an application has been dismissed as defective shall be accompanied by a list of
reasons why the application has been dismissed. Any applicant whose application has been
dismissed may resubmit its application at a later date, provided the applicant submits a filing
that contains proof that the defects have been cured.
2) Applications that have been dismissed as defective shall not lose their place in consideration
on a first-come, first-served basis, provided, however, that competing applications previously
received may continue to be considered and acted upon by the Republic of Nauru.
3) If an application that has been rejected as defective by the Republic of Nauru is later refiled
with its defects cured, and in the mean time other competing applications are filed between
the time of rejection and its refiling, the refiled application shall be considered and acted
upon before such other competing applications are considered and acted upon.
4) Dismissal of rejected applications will be without prejudice.
b) An application may be accepted for filing, and the applicant noticed that omissions or
discrepancies need to be corrected before it is considered for grant if:
1) The application is defective with respect to completeness of answers to questions,
informational showings, internal inconsistencies, execution, or other matters of a formal
character; or
2) The application does not substantially comply with these Rules for Space Station
Applications in the W-Band or with specific requests for additional information made by
the Republic of Nauru, or other requirements.
37
§17 Oppositions to Applications
§17 Oppositions to Applications
3) The application is accompanied by a request which sets forth the reasons in support of a
waiver of (or an exception to), in whole or in part, any specific rule, regulation, or
requirement with which the application is in conflict;
4) The Republic of Nauru, upon its own motion, waives (or allows an exception to), in whole
or in part, any rule, regulation or requirement.
c) If an applicant is requested by the Republic of Nauru to file any additional information or any
supplementary or explanatory information not specifically required in the prescribed application
form or these rules, a failure to comply with the request within 30 days will be deemed to render
the application defective and will subject it to dismissal without prejudice.
§17
Oppositions to Applications
a) Petitions to deny, petitions for other forms of relief, and other objections or comments shall:
1) Identify the application or applications (including applicant's name and Republic of Nauru
file numbers) with which it is concerned;
2) Be filed within 10 days after the date of public notice announcing the acceptance for filing of
the application or major amendment thereto (unless the Republic of Nauru otherwise
extends the filing deadline);
3) Be filed in accordance with the pleading limitations, periods and other applicable provisions
of these Rules for Space Station Applications in the W-Band;
4) Contain specific allegations of fact to support the specific relief requested, which shall be
supported by affidavit of a person or persons with personal knowledge thereof, and which
shall be sufficient to demonstrate that the petitioner (or respondent) is a party of interest and
that a grant of, or other Republic of Nauru action regarding, the application would be prima
facie inconsistent with the public interest; and
5) Contain a certificate of service showing that a copy of it has been received by the applicant
no later than the date the pleading is filed with the Republic of Nauru.
6) Be filed under penalty of perjury and punishable by a fine or imprisonment as determined by
a court of competent jurisdiction.
b) The Republic of Nauru will classify as informal objections:
1) Any pleading not filed in accordance with this section;
2) Any pleading to which the 10 day public notice period does not apply; or
3) Any objections to the grant of an application when the objections do not conform to either
this section or to other Republic of Nauru rules and requirements.
c) Oppositions to petitions to deny an application or responses to comments and informal
objections regarding an application may be filed within 14 days after the petition, comment, or
38
§18 Consideration of Applications
§20 Amendments to Applications
objection is filed and shall be filed in accordance with other applicable provisions of this
chapter.
d) Reply comments by the party that filed the original petition may be filed with respect to
pleadings filed pursuant to this section within 10 days after the time for filing oppositions has
expired unless the Republic of Nauru otherwise extends the filing deadline and shall be in
accordance with other applicable provisions of this chapter.
§18
Consideration of Applications
a) Applications for an authorisation, or for modification or renewal of an authorisation, shall be
granted if, upon examination of the application, any pleadings or objections filed, and upon
consideration of such other matters as it may officially notice, the Republic of Nauru finds that
the applicant is legally, technically, and otherwise qualified, that the proposed facilities and
operations comply with all applicable rules, regulations, and policies, and that grant of the
application will serve the public interest, convenience and necessity.
b) Whenever the Republic of Nauru grants any application in part, or subject to any terms or
conditions other than those routinely applied to applications of the same type, the grant shall be
considered final.
Part C – Amendments, Modifications, and Transfers
§19
Special Temporary Authorisations
a) In circumstances requiring immediate or temporary use of facilities, request may be made for
special temporary authority to install and/or operate new or modified equipment. The request
must contain the full particulars of the proposed operation including all facts sufficient to justify
the temporary authority sought and the public interest therein. No request for temporary
authority will be considered unless it is received by the Republic of Nauru at least 3 working
days prior to the date of proposed construction or operation or, where an extension is sought,
the expiration date of the existing temporary authorisation. A request received within less than 3
working days may be accepted only upon due showing of extraordinary reasons for the delay in
submitting the request which could not have been earlier foreseen by the applicant.
b) The Republic of Nauru may grant a temporary authorisation for a period not to exceed 180 days,
with additional periods not exceeding 180 days, upon a finding that there are extraordinary
circumstances requiring temporary operations in the public interest and that delay in the
institution of these temporary operations would seriously prejudice the public interest.
Convenience to the applicant, such as marketing considerations of meeting scheduled customer
in-service dates may be deemed sufficient for this purpose.
§20
Amendments to Applications
a) The Republic of Nauru may at any time order or require the applicant to amend his application
so as to make it more definite and certain or to submit such additional documents, or
statements, as in the judgment of the Republic of Nauru may be necessary.
39
§21 Modifications of Station License
§21 Modifications of Station License
b) Unless otherwise specified, any pending application may be amended until designated for
hearing, a public notice is issued stating that a substantive disposition of the application is to be
considered at a forthcoming Republic of Nauru meeting, or a final order disposing of the matter
is adopted by the Republic of Nauru.
c) Major amendments submitted shall be subject to public notice requirements. An amendment will
be deemed to be a major amendment under the following circumstances:
1) If the amendment increases the potential for interference, or changes the proposed
frequencies or orbital locations to be used.
2) If the amendment specifies a substantial change in beneficial ownership or control (de jure
or de facto) of an applicant.
3) If the amendment, or the cumulative effect of the amendment, is determined by the
Republic of Nauru otherwise to be substantial.
4) Any application will not be considered to be a newly filed application under the following
circumstances:
i) The amendment resolves frequency conflicts with authorized stations or other pending
applications but does not create new or increased frequency conflicts;
ii) The amendment reflects only a change in ownership or control found by the Republic of
Nauru to be in the public interest and, for which a requested exemption from a “cut-off”
date is granted;
iii) The amendment corrects typographical, transcription, or similar clerical errors which are
clearly demonstrated to be mistakes by reference to other parts of the application, and
whose discovery does not create new or increased frequency conflicts; or
iv) The amendment does not create new or increased frequency conflicts, and is
demonstrably necessitated by events which the applicant could not have reasonably
foreseen at the time of filing.
d) Any amendment to an application shall be signed and submitted in the same manner, and with
the same number of copies, as was the original application.
§21
Modifications of Station License
a) Except as provided for in this section, no modification of a radio station governed by this part
which affects the parameters or terms and conditions of the station authorisation shall be made
except upon application to and grant of such application by the Republic of Nauru. No license
modification will be required if the licensee seeks to access another licensed fixed satellite
provided the operators of the licensed systems have received specific authorisation to provide
the services to the proposed locations.
b) Applications for modification of an earth station license to add, change or replace transmitters
or antenna facilities will be considered to be minor modifications if the particulars of operations
40
§22 Transfers of Control
§22 Transfers of Control
remain unchanged and frequency coordination is not required, provided however, that the
maximum power and power density delivered into any antenna at the earth station site shall not
exceed the values calculated by subtracting the maximum antenna gain specified in the license
from the maximum authorized EIRP and EIRP density values.
c) Any application for extension of time must include a verified statement from the applicant:
1) That states the additional time is required due to unforeseeable circumstances beyond the
applicant's control, describes these circumstances with specificity, and justifies the precise
extension period requested; or
2) That states there are unique and overriding public interest concerns that justify an extension,
identifies these interests and justifies a precise extension period.
d) Equipment in an authorized earth station may be replaced without prior authorisation or prior
notification if the new equipment is electrically identical to the existing equipment.
e) Licensees may make changes to their authorized earth stations without obtaining prior Republic
of Nauru authorisation if frequency coordination procedures, as necessary, are complied with
and the modification does not involve:
1) An increase in EIRP or EIRP density (both main lobe and side lobe);
2) An increase in transmitted power;
3) An addition to an antenna facility, including hub earth stations and remote terminals, that is
already licensed, except for VSAT remote terminals.
f) Licensees shall notify the Republic of Nauru within 30 days after the modification is completed.
§22
Transfers of Control
a) No station licenses, nor any rights thereunder, shall be transferred, assigned, or disposed of in
any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any
corporation or any other entity holding such license, to any person except upon application to
the Republic of Nauru and upon finding by the Republic of Nauru that the pubic interest,
convenience and necessity will be served thereby, except:
1) If such a transfer of control is from a corporation not domiciled in the Republic of Nauru to
a corporation that is domiciled in the Republic of Nauru; and,
2) If all of the share holders of the transferor are identical in identity, number, and
proportionate ownership as are the shareholders of the transferee,
b) then the transferor need only provide a written notice to the Republic of Nauru within ten days
after completion of the transfer that such a transfer has been completed, along with a statement
that contains the information required in §11(c)(1)-(3) of these Rules for Space Station
Applications in the W-Band.
41
§23 Termination, Reinstatement
c) Transfers of control requiring Republic of Nauru approval shall include any and all transactions
that:
1) Change the party controlling the affairs of the licensee, or
2) Affect any change in a controlling interest in the ownership of the licensee, including
changes in legal or equitable ownership.
d) Assignment of license applications shall be submitted to assign voluntarily (as by, for example,
contract or other agreement) or involuntarily (as by, for example, death, bankruptcy, or legal
disability) the authorisation. In the case of involuntary assignment, the application should be
filed within 10 days of the event causing the assignment.
e) Applications for transfer of control of corporation holding license shall be submitted in order to
transfer voluntarily or involuntarily (de jure or de facto) control of a corporation holding any
licenses. In the case of involuntary transfer of control, the applications shall be filed within 10
days of the event causing the transfer of control.
f) Assignments and transfers of control shall be completed within 60 days from the date of
authorisation. Within 30 days of consummation, the Republic of Nauru shall be notified by letter
of the date of consummation and the file numbers of the applications involved in the
transaction.
g) Transfer of control of any authorisations granted pursuant to these Rules for Space Station
Applications in the W-Band shall be permitted at any time, provided that if the proposed
transfer occurs before the applicant places its space stations into operation, the transferee shall
continue to be bound by the original due diligence restrictions set forth in these Rules for
Space Station Applications in the W-Band.
h) At the discretion of the Republic of Nauru, a pending transfer of control may be considered to
justify extension of the due diligence deadlines set forth within these Rules for Space Station
Applications in the W-Band.
i) Any entity that seeks to transfer its authorisations shall file, together with an application for
consent to the transfer, copies of all contracts for sale, option agreements, management
agreements, or other documents disclosing the total consideration received in return for the
transfer of its license. The information submitted shall include not only a monetary purchase
price, but also any future, contingent, in-kind, or other consideration.
j) If the original license pertaining to an application for consent to transfer control that has been
filed under these Rules for Space Station Applications in the W-Band was granted on a nonrevenue basis, then the conditions upon which that original grant were made shall remain
binding and in full force and effect for the applicant into whose control the transfer has been
requested.
§23
Termination, Reinstatement
a) Where any person to whom an authorisation has been issued pursuant to this subpart has
willfully failed to make a complete disclosure with regard to the real party or parties in interest or
42
as to all matters and things required to be disclosed in the application, the Republic of Nauru at
any time may order such person to show cause why such authorisation should not be revoked.
Such person will be given reasonable opportunity to respond in writing to the order to show
cause. Upon consideration of the response, the Republic of Nauru will determine whether an
order of revocation should issue or whether further proceedings, as may be appropriate, should
be instituted.
b) A forfeiture or revocation may be imposed for:
1) Failure to operate in conformance with these Rules for Space Station Applications in the
W-Band;
2) Failure to operate in conformance with any license specifications, or any conditions imposed
on an authorization;
3) Failure to operate in conformance with any of the Republic of Nauru's rules and regulations;
4) Failure to comply with Republic of Nauru requests for information needed to complete
international coordination;
5) Failure to cooperate in Republic of Nauru investigations with respect to international
coordination;
6) Malicious transmissions of any signal that causes harmful interference with any other radio
communications or signals.
c) A license may be revoked for any repeated and willful violation of the kind set forth in this
section, provided, however, that sanctions specified in this section will be imposed only after the
licensee has been provided an opportunity to be heard.
d) Authorisation shall be automatically terminated in whole or in part without further notice to the
licensee upon:
1) The expiration of the required date of completion of construction or other required action
specified in the authorisation, or after any additional time authorized by the Republic of
Nauru, if a certification of completion of the required action has not been filed with the
Republic of Nauru unless a request for an extension of time has been filed with the Republic
of Nauru but has not been acted on;
2) The expiration of the license period, unless an application for renewal of the license has been
filed with the Republic of Nauru; or
3) The removal or modification of the facilities which renders the station not operational for
more than 90 days, unless specific authority is requested.
e) Any authorisation terminated in whole or in part under these Rules may be reinstated if the
Republic of Nauru, in its discretion, determines that reinstatement would best serve the public
interest, convenience and necessity. Petitions for reinstatement will be considered if:
1) The petition is filed within 30 days after the expiration date set forth;
43
§24 Transmitting Earth Stations
§27 Frequencies and Tolerances
2) The petition explains the failure to file a timely notification or renewal application; and
3) The petition sets forth with specificity the procedures which have been established to insure
timely filings in the future.
f) A special temporary authorisation shall automatically terminate upon the expiration date
specified therein, or upon failure of the grantee to comply with any special terms or conditions
set forth in the authorisation. Temporary operation may be extended beyond the termination
date only upon application to the Republic of Nauru.
Part D – Technical Standards and Operations
Transmitting Earth Stations
Transmissions of signals or programming to internationally-licensed satellites may be subject to
restrictions as a result of international agreements or treaties. The Republic of Nauru will maintain
public information on the status of any such agreements.
§24
Receive-only Earth Stations
Reception of signals or programming from internationally-licensed satellites may be subject to
restrictions as a result of international agreements or treaties. The Republic of Nauru will maintain
public information on the status of any such agreements.
§25
§26
Construction Certification
a) Each license for an earth station governed by this part shall specify as a condition therein the
period in which construction of facilities must be completed and station operation commenced.
Construction of the earth station must be completed and the station must be brought into
regular operation within 12 months from the date of the construction permit and/or license
grant except as may be otherwise determined by the Republic of Nauru for any particular
application.
b) If the facility does not meet required technical parameters, a request for a waiver shall be
submitted and approved by the Republic of Nauru before operations may commence.
c) Each receiving earth station licensed shall be constructed and placed into service within 6
months after coordination has been completed. Each licensee or registrant shall file with the
Republic of Nauru a certification that the facility is completed and operating, with the exception
of certification of antenna patterns.
§27
Frequencies and Tolerances
a) Orbital locations assigned to space stations licensed by the Republic of Nauru are subject to
change by summary order of the Republic of Nauru on 30 days notice. An authorisation to
construct and/or to launch a space station becomes null and void if the construction is not
begun or is not completed, or if the space station is not launched and positioned at its assigned
orbital location and operations commenced in accordance with the station authorisation, by the
respective date(s) specified in the authorisation.
44
§28 Choice of Sites and Frequencies
b) The carrier frequency of each earth station transmitter authorized in these services shall be
maintained within 0.001 percent of the reference frequency.
c) The carrier frequency of each space station transmitter authorized in these services shall be
maintained within 0.002 percent of the reference frequency.
d) The mean power of emissions shall be attenuated below the mean output power of the
transmitter in any event when an emission outside of the authorized bandwidth causes harmful
interference.
e) Telemetry, tracking and telecommand functions shall be conducted at either or both edges of
the allocated band(s). Frequencies, polarization and coding shall be selected to minimize
interference into other satellite networks and within their own satellite system.
§28
Choice of Sites and Frequencies
a) Sites and frequencies for earth stations, operating in frequency bands shared with equal rights
between terrestrial and space services, shall be selected, to the extent practicable, in areas where
the surrounding terrain and existing frequency usage are such as to minimize the possibility of
harmful interference between the sharing services.
b) An applicant for an earth station authorisation in a frequency band shared with equal rights with
terrestrial microwave services shall compute the great circle coordination distance contour(s) for
the proposed station, submitting with the application a map or maps drawn to appropriate scale
and in a form suitable for reproduction indicating the location of the proposed station and these
contours.
1) These maps, together with the pertinent data on which the computation of these contours is
based, including all relevant transmitting and/or receiving parameters of the proposed
station that might be useful in assessing the likelihood of interference, an appropriately
scaled plot of the elevation of the local horizon as a function of azimuth, and the electrical
characteristics of the earth station antenna(s), shall be submitted by the applicant in a single
exhibit to the application.
2) The coordination distance contour plot(s), horizon elevation plot, and antenna horizon gain
plot(s) required by this section may also be submitted in tabular numerical format at 5 deg.
azimuthal increments instead of graphical format.
3) At a minimum, this exhibit shall include the information listed in paragraph (c)(2) of this
section.
4) An earth station applicant shall also include in the application relevant technical details (both
theoretical calculations and/or actual measurements) of any special techniques, such as the
use of artificial site shielding, or operating procedures or restrictions at the proposed earth
station which are to be employed to reduce the likelihood of interference, or of any
particular characteristics of the earth station site which could have an effect on the
calculation of the coordination distance.
45
c) Prior to the filing of his application, an earth station applicant shall coordinate the proposed
frequency usage with existing terrestrial users and with applicants for terrestrial station
authorisations with previously filed applications in accordance with the following procedure:
1) An applicant for an earth station authorisation shall perform an interference analysis for each
terrestrial station, for which a license or construction permit has been granted or for which
an application has been accepted for filing, which is or is to be operated in a shared
frequency band to be used by the proposed earth station and which is located within the
great circle coordination distance contour(s) of the proposed earth station.
2) The earth station applicant shall provide each such terrestrial station licensee, permittee, and
prior filed applicant with the technical details of the proposed earth station and the relevant
interference analyses that were made. At a minimum, the earth station applicant shall provide
the terrestrial user with the following technical information:
i) The geographical coordinates of the proposed earth station antenna(s),
ii) Proposed operating frequency band(s) and emission(s),
iii) Antenna center height above ground and ground elevation above mean sea level,
iv) Antenna gain pattern(s) in the plane of the main beam,
v) Longitude range of geostationary satellites at which antenna may be pointed,
vi) Horizon elevation plot,
vii) Antenna horizon gain plot(s) for satellite longitude range, taking into account earth
stations operating with non-geostationary satellites.
viii) Minimum elevation angle,
ix) Maximum effective isotropically radiated power (EIRP) in any 4 kHz band in the main
beam, (dBW/4 kHz),
x) Maximum available RF transmit power in any 1 MHz band and in any 4 kHz band at the
input terminals of the antenna(s),
xi) Maximum permissible RF interference power level for all applicable percentages of time,
and
xii) A plot of great circle coordination distance contour(s) and rain scatter coordination
distance contour(s).
3) The 30-day period allowed for response to a request for coordination may be increased to a
maximum of 45 days by consent of the Republic of Nauru.
4) Where technical problems are resolved by an agreement or operating arrangement between
the parties that would require special procedures be taken to reduce the likelihood of
46
§29 Minimum Angle of Antenna Elevation
§31 Fixed Satellite Space Stations
harmful interference (such as the use of artificial site shielding) or would result in lessened
quality or capacity of either system, the details thereof shall be contained in the application.
5) The Republic of Nauru may, in the course of examining any application, require the
submission of additional showings, complete with pertinent data and calculations, showing
that harmful interference is not likely to result from the proposed operation.
d) An applicant for an earth station authorisation shall also ascertain whether the great circle
coordination distance contours and rain scatter coordination distance contours for international
coordination, cross the boundaries of another administration. In this case, the applicant shall
furnish the Republic of Nauru copies of these contours on maps drawn to appropriate scale for
use by the Republic of Nauru in effecting coordination of the proposed earth station with the
administration(s) affected.
e) An applicant for an earth station that will operate with a geostationary satellite or nongeostationary satellite in a shared frequency band in which the non-geostationary system is (or is
proposed to be) licensed for feeder links, shall demonstrate in its applications that its proposed
earth station will not cause unacceptable interference to any other satellite network that is
authorized to operate in the same frequency band, or certify that the operations of its earth
station shall conform to established coordination agreements between the operator(s) of the
space station(s) with which the earth station is to communicate and the operator(s) of any other
space station licensed to use the band.
Minimum Angle of Antenna Elevation
Earth station antennas shall not normally be authorized for transmission at angles less than 5 deg.
measured from the horizontal plane to the direction of maximum radiation. However, upon a
showing that the transmission path will be seaward and away from land masses or upon special
showing of need for lower angles by the applicant, the Republic of Nauru will consider authorizing
transmissions at angles between 3 deg. and 5 deg. in the pertinent directions. In certain instances, it
may be necessary to specify minimum angles greater than 5 deg. because of interference
considerations.
§29
Cessation of Emissions
Space stations shall be made capable of ceasing radio emissions by the use of appropriate devices
(battery life, timing devices, ground command, etc.) that will ensure definite cessation of emissions.
§30
§31
Fixed Satellite Space Stations
a) All space stations in the Fixed-Satellite Service shall be designed to derive the maximum capacity
feasible from the assigned orbital location. In particular, space stations in the Fixed-Satellite
Service are required to employ state-of-the-art full frequency re-use using both horizontal and
vertical polarization, including re-use of the frequency bands by polarization discrimination in
both the uplink and downlink directions using state-of-the-art equipment and techniques.
Furthermore, satellites must employ polarization discrimination so that, through the use of dual
polarization, they shall be able to reuse both the uplink and downlink frequency band
assignments.
47
§32 Control of Transmitting Stations
§32 Control of Transmitting Stations
b) Space stations to be operated in the geostationary satellite orbit shall be:
1) Designed with the capability of being maintained in orbit within 0.05 deg. of their assigned
orbital longitude,
2) Maintained in orbit at their assigned orbital longitude within the longitudinal tolerance
specified by the Republic of Nauru, and
3) The Republic of Nauru may authorize operations at assigned orbital longitudes offset by
0.05 deg. or multiples thereof from the nominal orbital location specified in the station
authorisations.
c) All operators of space stations shall, on June 30 of each year, file a report with the Republic of
Nauru containing the following information current as of May 31 of that year:
1) Status of satellite construction and anticipated launch dates, including any major problems or
delays encountered;
2) A listing of any non-scheduled transponder outages for more than thirty minutes and the
cause(s) of such outages;
3) A detailed description of the utilization made of each transponder on each of the in-orbit
satellites. This description should identify the total capacity or the percentage of time each
transponder is actually used for transmission, and the amount of unused system capacity in
the transponder. This information is not required for those transponders that are sold on a
non-common carrier basis. In that case, operators should indicate the number of
transponders sold on each in- satellite orbit.
4) Identification of any transponders not available for service or otherwise not performing to
specifications, the cause of these difficulties, and the date any transponder was taken out of
service or the malfunction identified.
§32
Control of Transmitting Stations
a) The licensee of a facility licensed under this part is responsible for the proper operation and
maintenance of the station.
b) The licensee of a transmitting earth station licensed under this part shall ensure that a trained
operator is present on the earth station site, or at a designated remote control point for the earth
station, at all times that transmissions are being conducted. No operator's license is required for
a person to operate or perform maintenance on facilities authorized under this part.
c) Authority will be granted to operate a transmitting earth station by remote control only on the
conditions that:
1) The parameters of the transmissions of the remote station monitored at the control point,
and the operational functions of the remote earth stations that can be controlled by the
operator at the control point, are sufficient to insure that the operations of the remote
station(s) are at times in full compliance with the remote station authorisation(s);
48
§33 Inter-system Coordination
§33 Inter-system Coordination
2) The earth station facilities are protected by appropriate security measures to prevent
unauthorized entry or operations;
3) Upon detection by the license, or upon notification from the Republic of Nauru of a
deviation or upon notification by another licensee of harmful interference, the operation of
the remote station shall be immediately suspended by the operator at the control point until
the deviation or interference is corrected, except that transmissions concerning the
immediate safety of life or property may be conducted for the duration of the emergency;
and
4) The licensee shall have available at all times the technical personnel necessary to perform
expeditiously the technical servicing and maintenance of the remote stations.
d) The licensee shall insure that the licensed facilities are properly secured against unauthorized
access or use whenever an operator is not present at the transmitter.
§33
Inter-system Coordination
a) Each space station licensee shall establish a satellite network control center which will have the
responsibility to monitor space-to-Earth transmissions in its system. This would indirectly
monitor uplink earth station transmissions in its system and to coordinate transmissions in its
satellite system with those of other systems to prevent harmful interference incidents or, in the
event of a harmful interference incident, to identify the source of the interference and correct
the problem promptly.
b) Each space station licensee shall maintain on file with the Republic of Nauru a current listing of
the names, titles, addresses and telephone numbers of the points of contact for resolution of
interference problems. Contact personnel should include those responsible for resolution of
short term, immediate interference problems at the system control center, and those responsible
for long term engineering and technical design issues.
c) The transmitting earth station licensee shall provide the operator(s) of the satellites, on which
the licensee is authorized to transmit, contact telephone numbers for the control center of the
earth station and emergency telephone numbers for key personnel; a current file of these
contacts shall be maintained at each satellite system control center.
d) An earth station licensee shall ensure that each of its authorized earth stations complies with the
following:
1) The earth station licensee shall ensure that there is continuously available means of
communications between the satellite network control center and the earth station operator
or its remote control point as designated by the licensee.
2) The earth station operator shall notify the satellite network control center and receive
permission from the control center before transmitting to the satellite or changing the basic
characteristics of a transmission.
3) The earth station operator shall keep the space station licensee informed of all actual and
planned usage.
49
§34 Space Communications Transmissions
§35 Harmful Interference
4) Upon approval of the satellite network control center, the earth station operator may radiate
an RF carrier into the designated transponder. Should improper illumination of the
transponder or undue adjacent transponder interference be observed by the satellite network
control center, the earth station operator shall immediately take whatever measures are
needed to eliminate the problem.
5) The space station licensee may delegate the responsibility and duties of the satellite network
control center to a technically qualified user or group of users, but the space station licensee
shall remain ultimately responsible for the performance of those duties.
§34
Space Communications Transmissions
a) No person shall transmit to a satellite unless the specific transmission is first authorized by the
satellite network control center; conduct transmissions over a transponder unless the operator is
authorized by the satellite licensee or the satellite licensee's successor in interest to transmit at
that time; or transmit in any manner that causes unacceptable interference to the authorized
transmission of another licensee.
b) Satellite operators shall provide upon request by the Republic of Nauru and by earth station
licensees authorized to transmit on their satellites relevant information needed to avoid
unacceptable interference to other users, including the polarization angles for proper
illumination of a given transponder.
c) Space station licensees are responsible for maintaining complete and accurate technical details of
current and planned transmissions over their satellites, and shall require that authorized users of
transponders on their satellites, whether by tariff or contract, provide any necessary technical
information in this regard. Based on this information, space station licensees shall exchange
among themselves general technical information concerning current and planned transmission
parameters as needed to identify and promptly resolve any potential cases of unacceptable
interference between their satellite systems.
§35
Harmful Interference
a) The earth station operator whose transmission is suffering harmful interference shall first check
the earth station equipment to ensure that the equipment is functioning properly.
b) The earth station operator shall then check all other earth stations in the licensee's network that
could be causing the harmful interference to ensure that none of the licensee's earth stations are
the source of the interference and to verify that the source of interference is not from a local
terrestrial source.
c) After the earth station operator has determined that the source of the interference is not another
earth station operating in the same network or from a terrestrial source, the earth station
operator shall contact the satellite system control center and advise the satellite operator of the
problem. The control center operator shall observe the interference incident and make
reasonable efforts to determine the source of the problem. A record shall be maintained by the
control center operator and the earth station operator of all harmful interference incidents and
their resolution. These records shall be made available to the Republic of Nauru on request.
50
§36 Particulars of Operation
§36 Particulars of Operation
d) Where the suspected source of the interference incident is the operation of an earth station
licensed to operate on one or more of the satellites in the satellite operator's system, the control
center operator shall advise the offending earth station of the harmful interference incident and
assist in the resolution of the problem where reasonably possible.
e) The earth station licensee whose operations are suspected of causing harmful interference to the
operations of another earth station shall take reasonable measures to determine whether its
operations are the source of the harmful interference problem. Where the operations of the
suspect earth station are the source of the interference, the licensee of that earth station shall
take all measures necessary to eliminate the interference.
f) At any point, the system control center operator may contact the Ministry of
Telecommunications to assist in resolving the matter. This office specializes in the resolution of
satellite interference problems. All licensees are required to cooperate fully with the Republic of
Nauru in any investigation of interference problems.
g) Where the earth station suspected of causing interference to the operations of another earth
station cannot be identified or is identified as an earth station operating on a satellite system
other than the one on which the earth station suffering undue interference is operating, it is the
responsibility of a representative of the earth station suffering harmful interference to contact
the control center of other satellite systems.
§36
Particulars of Operation
a) Radio station authorisations issued hereunder shall normally specify only the frequency bands
authorized for transmission and/or reception of the station.
b) When authorized frequency bands are specified in the station authorisation, the licensee is
authorized to transmit any number of RF carriers on any discrete frequencies within an
authorized frequency band in accordance with the other terms and conditions of the
authorisation and the requirements of this part. Specific RF carrier frequencies within the
authorized frequency band shall be selected by the licensee to avoid unacceptable levels of
interference being caused to other earth, space or terrestrial stations. Any coordination
agreements, both domestic and international, concerning specific frequency usage constraints,
including non-use of any particular frequencies within the frequency bands listed in the station
authorisation, are considered to be conditions of the station authorisation.
c) A license for a transmitting earth station will normally specify only the RF carriers having the
highest EIRP density, the narrowest bandwidth, and the largest bandwidth authorized for
transmission from that station. Unless otherwise specified in the station authorisation, the
licensee is authorized to transmit any other type of carrier not specifically listed which does not
exceed the highest EIRP, EIRP density and bandwidth prescribed for any listed emission.
d) Only the most sensitive emission(s) for which protection is being afforded from interference in
the authorized receive frequency band(s) will be specified in the station authorisation.
51
§37 Points of Communication
§37
§38 Temporary Fixed Earth Station Operations
Points of Communication
e) Unless otherwise specified in the station authorisation, an earth station is authorized to transmit
to any space station in the same radio service provided that permission has been received from
the space station operator to access that space station.
f) Space stations licensed under this part are authorized to provide service to earth stations located
within the specified service area. Coastal waters within the outer continental shelf shall be
considered to be included within the service area specified by the named land mass.
§38
Temporary Fixed Earth Station Operations
a) When an earth station in the Fixed-Satellite Service is to remain at a single location for fewer
than 6 months, the location may be considered to be temporary fixed. Services provided at a
single location which are initially known to be of longer than six months' duration shall not be
provided under a temporary fixed authorisation.
b) When a station, authorized as a temporary fixed earth station, is to remain at a single location for
more than six months, application for a regular station authorisation at that location shall be
filed at least 30 days prior to the expiration of the six-month period.
c) The licensee of an earth station which is authorized to conduct temporary fixed operations in
bands shared co-equally with terrestrial fixed stations shall provide the following information to
the Republic of Nauru before beginning transmissions:
1) The name of the person operating the station and the telephone number at which the
operator can be reached directly;
2) The exact frequency or frequencies used and the type of emissions and power levels to be
transmitted; and
3) The commencement and anticipated termination dates of operation from each location.
d) Transmissions may not be commenced until all affected terrestrial licensees have been notified
and the earth station operator has confirmed that unacceptable interference will not be caused to
such terrestrial stations.
e) Operations of temporary fixed earth stations shall cease immediately upon notice of harmful
interference from the Republic of Nauru or the affected licensee.
52
CHAPTER 5:
MARKETING STRATEGIES
Outsourced-based Virtual Structuring
A decision to outsource most SWANSAT operations is the inherently logical choice for
day-to-day operational implementation due to initial design considerations that separated the
SWANSAT power plant from its communications payload. SWANSAT will be required to
outsource ownership, command, and control of its nuclear power system to a United States
Department of Defense-approved third party. Because the spacecraft vendor is qualified to act
in this capacity, design, construction, launch, delivery to orbit, ongoing Telemetry, Tracking
and Control, stationkeeping, and ground station operation will be outsourced to that vendor.
The SWANSAT powerplant will be leased from the vendor.
The following other areas of SWANSAT system outsourcing have been identified: earth
station (i.e., handsets and computer interfaces) design and manufacturing; software and
information infrastructure design and operations; hardware and network design and
operations; marketing and public relations; billing and financial management; day-to-day
SWANSAT system operations; and market optimization of unused SWANSAT system capacity.
Furthermore, because the SWANSAT coverage area will accommodate a series of eight
Subscriber Account Territories or SATs, the operation and management of the SATs can be
outsourced to separate entrepreneurial enterprise such as limited partnerships. A group of
affiliated entities to which SWANSAT intends to outsource these areas is proposed herein.
Revenue Creation Model
SWANSAT will make money from sales of its services and technology. Sales will come
from retail customers and from wholesale resellers. SWANSAT accounts will be sold directly to
end user customers via the internet. Non-profit organizations will be welcome to offer
SWANSAT accounts to their members and constituents, with a 20% referral fee paid when
revenue is collected from those constituents who open their own SWANSAT accounts.
SWANSAT will also license its patented proprietary approach to doing W-band
53
telecommunications with high-powered broadcast platforms, including its business model of
working with and on behalf of non-profit corporations.
SWANsat Subscriber Account Territories
Eight management corporations are proposed to serve as General Partners to
individual Subscriber Account Territory (SAT) Limited Partnerships. The authorized General
Partners would be wholly-owned or partly-owned subsidiary companies of a proposed
umbrella corporation, SWANsat Holdings, LLC. The SAT partnerships would include:
SWANsat 1, Inc. (Accounts in North America)
SWANsat 2, Inc. (Accounts in Central and South America and the Caribbean)
SWANsat 3, Inc. (Accounts in the UK and Europe)
SWANsat 4, Inc. (Accounts in Asia, Australia & New Zealand, and in Oceania)
SWANsat 5, Inc. (Accounts in Africa)
SWANsat 6, Inc. (Accounts in India)
SWANsat 7, Inc. (Accounts in the Middle East)
SWANsat 8, Inc. (Accounts in China)
54
Each of these corporations will be licensed to form Limited Partnerships to serve the Territory
assigned to it. Ten Limited Partnerships are proposed to manage individual Subscriber
Accounts in the eight SATs: SWANsat Territory 1A, Ltd. and SWANsat Territory 1B, Ltd.;
SWANsat Territory 2, Ltd.; SWANsat Territory 3A, Ltd. and SWANsat Territory 3B, Ltd.;
SWANsat 4, Ltd.; SWANsat 5, Ltd.; SWANsat Territory 6, Ltd.; SWANsat Territory 7, Ltd.;
and SWANsat Territory 8, Ltd. It is proposed that each limited partnership be licensed to
manage 1,000,000 Subscriber Accounts.
Account Territories and Top Level Domains
It is proposed that SWANSAT assign account territories consistent with the top level
domain standards currently in use by the internet. Adopting the internet top level domains to
the SWANSAT subscriber accounts will generate the following table of territories:
SAT NAT
Code Code
101 1
102 1
103 1
104 299
105 508
America (USA)
Bermuda
Canada
Greenland
Saint Pierre and Miquelon
.us
.bm
.ca
.gl
.pm
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
Anguilla
Antarctica
Antigua and Barbuda
Argentina
Aruba
Ascension Island
Bahamas
Barbados
Belize
Bolivia
Bouvet Island
Brazil
Cayman Islands
Chile
Colombia
Costa Rica
Cuba
Dominica
.ai
.aq
.ag
.ar
.aw
.ac
.bs
.bb
.bz
.bo
.bv
.br
.ky
.cl
.co
.cr
.cu
.dm
1
1
1
1
54
247
1
1
501
591
672
55
1
56
57
506
53
1
Country
TLD
55
Map Coordinates
Longitude Latitude
38 00 N 97 00 W
32 20 N 64 45 W
60 00 N 95 00 W
72 00 N 40 00 W
46 50 N 56 20 W
18
90
17
34
12
7
24
13
17
17
54
10
19
30
4
10
21
15
15
00
03
00
30
95
15
10
15
00
26
00
30
00
00
00
30
25
N
S
N
S
N
S
N
N
N
S
S
S
N
S
N
N
N
N
63
0
61
64
69
14
76
59
88
65
3
55
80
71
72
84
80
61
10
00
48
00
58
37
00
32
45
00
24
00
30
00
00
00
00
20
W
E
W
W
W
W
W
W
W
W
E
W
W
W
W
W
W
W
SAT NAT
Code Code
219 1
220 593
221 520
222 500
223 594
224 1
225 590
226 502
227 592
228 509
229 504
230 1
231 596
232 52
233 1
234 599
235 505
236 507
237 595
238 51
239 1
240 290
241 1
242 1
243 1
244 1
245 597
246 1
247 1
248 598
249 58
250 1
251 1
Dominican Republic
Ecuador
El Salvador
Falkland Islands (Malvina)
French Guiana
Grenada
Guadeloupe
Guatemala
Guyana
Haiti
Honduras
Jamaica
Martinique
Mexico
Montserrat
Netherlands Antilles
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
Saint Helena
Saint Kitts and Nevis
Saint Lucia
Saint Vincent and the Grenadines
S. Georgia & S. Sandwich Islands
Suriname
Trinidad and Tobago
Turks and Caicos Islands
Uruguay
Venezuela
Virgin Island (British)
Virgin Islands (American)
.do
.ec
.sv
.fk
.gf
.gd
.gp
.gt
.gy
.ht
.hn
.jm
.mq
.mx
.ms
.an
.ni
.pa
.py
.pe
.pr
.sh
.kn
.lc
.vc
.gs
.sr
.tt
.tc
.uy
.ve
.vg
.vi
301
302
303
304
305
306
307
308
309
Albania
Andorra
Austria
Belarus
Belgium
Bosnia and Herzegovina
Bulgaria
Croatia/Hrvatska
Czech Republic
.al
.ad
.at
.by
.be
.ba
.bg
.hr
.cz
355
213
376
375
32
387
359
385
420
Country
TLD
56
Map Coordinates
Longitude Latitude
19 00 N 70 40 W
2 00 S 77 30 W
13 50 N 88 55 W
51 45 S 59 00 W
4 00 N 53 00 W
12 07 N 61 40 W
16 15 N 61 35 W
15 30 N 90 15 W
5 00 N 59 00 W
19 00 N 72 25 W
15 00 N 86 30 W
18 15 N 77 30 W
14 40 N 61 00 W
23 00 N 102 00 W
16 45 N 62 12 W
12 15 N 68 45 W
13 00 N 85 00 W
9 00 N 80 00 W
23 00 S 58 00 W
10 00 S 76 00 W
18 15 N 66 30 W
15 56 S 5 42 W
17 20 N 62 45 W
13 53 N 60 68 W
13 15 N 61 12 W
51 45 S 59 00 W
4 00 N 56 00 W
11 00 N 61 00 W
21 45 N 71 35 W
33 00 S 56 00 W
8 00 N 66 00 W
18 20 N 64 50 W
18 20 N 64 50 W
41
42
47
53
50
44
43
45
49
00
30
20
00
50
00
00
10
45
N
N
N
N
N
N
N
N
N
20
1
13
28
4
18
25
15
15
00
30
20
00
00
00
00
30
30
E
E
E
E
E
E
E
E
E
SAT NAT
Code Code
310 45
311 372
312 298
313 358
314 33
315 49
316 350
317 30
318 44
319 36
320 354
321 353
322 44
323 39
324 44
325 371
326 423
327 370
328 352
329 389
330 356
331 373
332 377
333 31
334 47
335 48
336 351
337 40
338 378
339 381
Country
340
341
342
343
344
345
346
347
348
421
386
34
47
46
41
380
44
39
Denmark
Estonia
Faroe Islands
Finland
France
Germany
Gibraltar
Greece
Guernsey
Hungary
Iceland
Ireland
Isle of Man
Italy
Jersey
Latvia
Liechtenstein
Lithuania
Luxembourg
Macedonia
Malta
Moldova
Monaco
Netherlands
Norway
Poland
Portugal
Romania
San Marino
Serbia and Montenegro
(Yugoslavia)
Slovak Republic
Slovenia
Spain
Svalbard
Sweden
Switzerland
Ukraine
United Kingdom
Vatican (Holy See)
401
402
684
61
American Samoa
Australia
TLD
.dk
.ee
.fo
.fi
.fr
.de
.gi
.gr
.gg
.hu
.is
.ie
.im
.it
.je
.lv
.li
.lt
.lu
.mk
.mt
.md
.mc
.nl
.no
.pl
.pt
.ro
.sm
.yu
57
Map Coordinates
Longitude Latitude
56 00 N 10 00 E
59 00 N 26 00 E
62 00 N 7 00 W
64 00 N 26 00 E
46 00 N 2 00 E
51 00 N 9 00 E
36 8 N 5 21 W
39 00 N 22 00 E
49 28 N 2 35 W
47 00 N 20 00 E
65 00 N 18 00 W
53 00 N 8 00 W
54 15 N 4 30 W
42 50 N 12 50 E
49 15 N 2 10 W
57 00 N 25 00 E
47 16 N 9 32 E
56 00 N 24 00 E
49 45 N 6 10 E
41 50 N 22 00 E
35 50 N 14 35 E
47 00 N 29 00 E
43 44 N 7 24 E
52 30 N 5 45 E
62 00 N 10 00 E
52 00 N 20 00 E
39 30 N 8 00 W
46 00 N 25 00 E
43 46 N 12 25 E
44 00 N 21 00 E
.sk
.si
.es
.sj
.se
.ch
.ua
.uk
.va
48
46
40
78
62
47
49
54
41
40
07
00
00
00
00
00
00
54
N
N
N
N
N
N
N
N
N
19
14
4
20
15
8
32
2
12
30
49
00
00
00
00
00
00
27
E
E
W
E
E
E
E
W
E
.as
.au
14 20 S 170 00 W
27 00 S 133 00 E
SAT NAT
Code Code
403 880
404 975
405 673
406 855
407 61
408 61
409 682
410 670
411 679
412 689
413 671
414 62
415 81
416 7
417 686
418 850
419 82
420 856
421 853
422 60
423 960
424 692
425 691
426 976
427 95
428 674
429 977
430 687
431 64
432 683
433 672
434 670
435 92
436 680
437 675
438 63
439 44
440 7
441 65
442 677
443 94
444 66
445 690
Country
TLD
Bangladesh
Bhutan
Brunei Darussalam
Cambodia
Christmas Island
Cocos (Keeling Islands)
Cook Islands
East Timor
Fiji
French Polynesia
Guam
Indonesia
Japan
Kazakhstan
Kiribati
Korea North
Korea South
Laos
Macau
Malaysia
Maldives
Marshall Islands
Micronesia
Mongolia
Myanmar (Burma)
Nauru
Nepal
New Caledonia
New Zealand
Niue
Norfolk Island
Northern Mariana Islands
Pakistan
Palau
Papua New Guinea
Philippines
Pitcairn Islands
Russian Federation
Singapore
Solomon Islands
Sri Lanka
Thailand
Tokelau
58
.bd
.bt
.bn
.kh
.cx
.cc
.ck
.tp
.fj
.pf
.gu
.id
.jp
.kz
.ki
.kp
.kr
.la
.mo
.my
.mv
.mh
.fm
.mn
.mm
.nr
.np
.nc
.nz
.nu
.nf
.mp
.pk
.pw
.pg
.ph
.pn
.ru
.sg
.sb
.lk
.th
.tk
Map Coordinates
Longitude Latitude
24 00 N 90 00 E
27 30 N 90 30 E
4 30 N 114 40 E
13 00 N 105 00 E
10 30 S 105 40 E
12 30 S 96 50 E
21 14 S 159 46 W
8 50 S 125 55 E
18 00 S 175 00 E
15 00 S 140 00 W
13 28 N 144 47 E
5 00 S 120 00 E
36 00 N 138 00 E
48 00 N 68 00 E
1 25 N 173 00 E
40 00 N 127 00 E
37 00 N 127 30 E
18 00 N 105 00 E
22 10 N 113 33 E
2 30 N 112 30 E
3 15 N 73 00 E
9 00 N 168 00 E
6 55 N 158 15 E
46 00 N 105 00 E
22 00 N 98 00 E
0 32 S 166 55 E
28 00 N 84 00 E
21 30 S 165 30 E
41 00 S 174 00 E
19 02 S 169 52 W
29 02 S 167 57 E
15 12 N 145 45 E
30 00 N 70 00 E
7 30 N 134 30 E
6 00 S 147 00 E
13 00 N 122 00 E
25 04 S 130 06 W
60 00 N 100 00 E
1 22 N 103 48 E
8 00 S 159 00 E
7 00 N 81 00 E
15 00 N 100 00 E
9 00 S 172 00 W
SAT NAT
Code Code
446 676
447 688
448 1
449 678
450 84
451 681
452 685
501
502
503
504
505
506
507
508
509
510
511
512
513
514
515
516
517
518
519
520
213
244
229
267
226
257
237
238
236
235
269
243
242
225
253
20
240
291
251
33
521
522
523
524
525
526
527
528
529
530
531
532
533
534
241
220
233
224
245
61
254
266
231
218
261
265
223
222
Country
TLD
Map Coordinates
Longitude Latitude
20 00 S 175 00 W
8 00 S 178 00 E
0 32 S 166 55 E
16 00 S 167 00 E
16 00 N 106 00 E
13 18 S 176 12 W
13 35 S 172 20 W
Tonga
Tuvalu
U.S. Minor Outlying Islands
Vanuatu
Vietnam
Wallis and Futuna Islands
Western Samoa
.to
.tv
.um
.vu
.vn
.wf
.ws
Algeria
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Comoros
Congo (Democratic Republic of)
Congo (Republic of)
Cote d'Ivoire
Djibouti
Egypt
Equatorial Guinea
Eritrea
Ethiopia
French Southern and Antarctic
Ter.
Gabon
Gambia
Ghana
Guinea
Guinea-Bissau
Heard and McDonald Islands
Kenya
Lesotho
Liberia
Libya
Madagascar
Malawi
Mali
Mauritania
.dz
.ao
.bj
.bw
.bf
.bi
.cm
.cv
.cf
.td
.km
.cg
.cd
.ci
.dj
.eg
.gq
.er
.et
.tf
28
12
9
22
13
3
6
16
7
15
12
1
0
8
11
27
2
15
8
43
00
30
30
00
00
30
00
00
00
00
10
00
00
00
30
00
00
00
00
00
N
S
N
S
N
S
N
N
N
N
S
S
N
N
N
N
N
N
N
S
3
18
2
24
2
30
12
24
21
19
44
15
25
5
43
30
10
39
38
67
00
30
15
00
00
00
00
00
00
00
15
00
00
00
00
00
00
00
00
00
E
E
E
E
W
E
E
W
E
E
E
E
E
W
E
E
E
E
E
E
.ga
.gm
.gh
.gn
.gw
.hm
.ke
.ls
.lr
.ly
.mg
.mw
.ml
.mr
1
13
8
11
12
53
1
29
6
25
20
13
17
20
00
28
00
00
00
06
00
30
30
00
00
30
00
00
S
N
N
N
N
S
N
S
N
N
S
S
N
N
11
16
2
10
15
72
38
28
9
17
47
34
4
12
45
34
00
00
00
31
00
30
30
00
00
00
00
00
E
W
W
W
W
E
E
E
W
E
E
E
W
W
59
SAT NAT
Code Code
535 230
536 269
537 212
538 258
539 264
540 227
541 234
542 262
543 250
544 239
545 221
546 248
547 232
548 252
549 27
550 249
551 268
552 255
553 228
554 216
555 256
556 212
557 260
558 263
Mauritius
Mayotte
Morocco
Mozambique
Namibia
Niger
Nigeria
Reunion Island
Rwanda
Sao Tome and Principe
Senegal
Seychelles
Sierra Leone
Somalia
South Africa
Sudan
Swaziland
Tanzania
Togo
Tunisia
Uganda
Western Sahara
Zambia
Zimbabwe
.mu
.yt
.ma
.mz
.na
.ne
.ng
.re
.rw
.st
.sn
.sc
.si
.so
.za
.sd
.sz
.tz
.tg
.tn
.ug
.eh
.zm
.zw
Map Coordinates
Longitude Latitude
20 17 S 57 33 E
12 50 S 45 10 E
32 00 N 5 00 W
18 15 S 35 00 E
22 00 S 17 00 E
16 00 N 8 00 E
10 00 N 8 00 E
21 06 S 55 36 E
2 00 S 30 00 E
1 00 N 7 00 E
14 00 N 14 00 W
4 35 S 55 40 E
8 30 N 11 30 W
10 00 N 49 00 E
29 00 S 24 00 E
15 00 N 30 00 E
26 30 S 31 30 E
6 00 S 35 00 E
8 00 N 1 10 E
34 00 N 9 00 E
1 00 N 32 00 E
24 30 N 13 00 W
15 00 S 30 00 E
20 00 S 30 00 E
601
602
91
44
India
.in
Indian Ocean Territory of Britain .io
20 00 N 77 00 E
20 00 S 80 00 E
701
702
703
704
705
706
707
708
709
710
711
712
713
714
715
93
374
994
973
357
995
98
964
972
962
965
996
961
968
970
Afghanistan
Armenia
Azerbaijan
Bahrain
Cyprus
Georgia
Iran
Iraq
Israel
Jordan
Kuwait
Kyrgyzstan
Lebanon
Oman
Palestinian Territories
33
40
40
26
35
42
32
33
31
31
29
41
33
21
32
Country
TLD
60
.af
.am
.az
.bh
.cy
.ge
.ir
.iq
.il
.jo
.kw
.kg
.lb
.om
.ps
00
00
30
00
00
00
00
00
30
00
30
00
50
00
00
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
65
45
47
50
33
43
53
44
34
36
45
75
35
57
35
00
00
30
33
00
30
00
00
45
00
45
00
50
00
15
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
SAT NAT
Code Code
716 974
717 966
718 963
719 992
720 90
721 993
722 971
723 998
724 967
Qatar
Saudi Arabia
Syrian Arab Republic
Tajikistan
Turkey
Turkmenistan
United Arab Emirates
Uzbekistan
Yemen
.qa
.sa
.sy
.tj
.tr
.tm
.ae
.uz
.ye
Map Coordinates
Longitude Latitude
25 30 N 51 15 E
25 00 N 45 00 E
35 00 N 38 00 E
39 00 N 71 00 E
39 00 N 35 00 E
40 00 N 60 00 E
24 00 N 54 00 E
41 00 N 64 00 E
15 00 N 48 00 E
801
802
803
China
Hong Kong S.A.R.
Taiwan
.cn
.hk
.tw
35 00 N 105 00 E
22 15 N 114 10 E
23 30 N 121 00 E
86
852
886
Country
TLD
SWANsat Entities
It is proposed that a group of SWANSAT entities and sub-entities be created to operate
SWANSAT. The organizational structure (and proposed names) for the business entities may
be illustrated in the figure at the top of the following page. The parties and business entities
created should have at least the following duties, rights, and responsibilities:
SWANsat Holdings, LLC, will hold exclusive worldwide rights to develop, market,
and exploit Subscriber Accounts, all of which are to be based on and deriving from the
licenses granted by the host countries. It will manage all Subscriber Account Territories and all
subscriber accounts worldwide, including the initial 12,000,000 subscriber accounts released in
SWANSAT Series Number One and in such subsequent series of satellite constellations as
SWANsat Holdings may create. It will pay for costs of design, construction, launch insurance,
launch, operation, operation insurance, on-orbit operational performance incentive payments,
and replacement of the satellite constellation to be designated as SWANSAT Series One.
61
SWANsat 1 – SWANsat 8, LLC, eight separate and distinct managing companies, are
proposed to serve as one managing company for each SAT; to manage its own particular
Subscriber Account Territory and all subscriber accounts within its territory; and to establish
one or more limited partnerships or other business entities for the purpose of financing the
business affairs of the SAT Managing Company. The decision to create or not to create limited
partnerships should remain with SWANsat Holdings, and each SAT Managing Company
should follow the directives of SWANsat Holdings in regard to the formation of limited
partnerships. Additional duties of the managing companies shall be to pay its pro rata costs for
the design, construction, launch insurance, launch, operation, operation insurance, on-orbit
operational performance incentive payments, and replacement of the satellite constellation;
and to pay from operating income the costs satellite constellation, utilizing such financing
methodology as SWANsat Holdings deems appropriate.
62
SWANsat Marketing, LLC, will be formed to create and manage the SWANSAT
graphic and corporate image; to advertise SWANSAT worldwide through whatever media and
means the company deems necessary and appropriate (including product placement in
television programs and motion pictures, ad placements on radio, television and in print); to
create advertisements and/promotions and to place said advertisements; to make payments for
the creation and placement of all such advertisements and promotions, and to receive ad
agency commissions on such placements; to serve as the exclusive portal for signing up all new
or renewing subscriber accounts; to reserve subscriber account numbers for new and returning
subscribers through an Internet sign-up methodology that will be created and maintained by
SWANsat Marketing; to create and implement promotional programs that attract new
subscribers and that upgrade current subscribers to additional services as new services are
developed in the future; to license or otherwise authorize the use of the SWANSAT logo on
consumer products; to collect subscriber fees and payments of any kind and to place such fees
and/or payments into merchant accounts set aside for SWANsat Holdings; to collect prelaunch monies from subscribers and to provide to each subscriber pre-launch SWANSAT
services; to reserve for each individual or corporate subscriber a private, unique subscriber
account number; to provide to each individual or corporate subscriber a spam-proof email
account with an email address based on the subscriber account number and including up to
five aliases; to provide to each individual or corporate Subscriber a web page, with a URL
based on the subscriber account number; to provide to each individual or corporate subscriber
an HTML edition of the SWANSAT newsletter; to provide to each individual or corporate
subscriber other benefits as SWANsat Marketing shall determine; to pay a pre-launch
promotional and/or royalty fee equal to 15% of gross revenues in exchange for free
advertisements or other ad placements undertaken at no cost to SWANsat Marketing; to retain
85% of pre-launch gross revenues as an advertising and administrative fee; to manage, control
and/or sub-license all websites for SWANsat Holdings and for the SWANSAT system, as the
same are defined and restricted herein, with input and parameters determined by SWANsat
Marketing; to collect, after the SWANSAT Series One constellation of satellites is launched and
operational, all subscriber fees and payments for goods or services, to pay proceeds as set forth
below:
63
Post Launch Table of Disbursements
Description
Host Country License Fee
LET License Fee
Credit Card Processing Fee
Fidelis Entertainment Fee
SWANsat 1 through SWANsat 8 General Partner Fee
SWANsat Marketing Advertising and Administrative Fee
Balance to be paid to SWANsat Holdings
*Not to exceed the gross revenues from 100,000 accounts
Percentage of
Gross Revenue
1.0%*
6.5%
2.5%
5.0%**
5.0%
30.0%
50.0%
**Or USD$5.00/account/month, whichever is greater
to collect pre-launch monies from subscribers; to provide pre-launch SWANSAT services; to
develop various promotional and service add-ons as upgrades or additions to basic
SWANSAT services, including first-run motion pictures, branded direct-to-subscriber music
distribution, etc.; to set pricing for subscriber accounts and other details of these services as
the services are developed; to set licensing terms and fees for placement of any outside
programming services as such outside programming may be developed or presented for
distribution on SWANSAT; to sponsor spacecraft development, including payment of preconstruction engineering costs, due-diligence expense reimbursements to the host countries,
costs incurred by LET to establish its offices; and to serve as agency of record for the
creation and placement of advertising for SWANsat Holdings and SWANSAT.
SWANsat Information Systems, LLC,
(“SIS”) will be tasked to develop and
manage SWANSAT interfaces with the SWANSAT vendor, with the Internet, and with the
various media sources whose services may be distributed over SWANSAT; to manage system
security, including hacker and/or terrorist interdiction; to develop and license software, either
through its own efforts or through sub-contacted developers, software to secure the privacy of
Subscribers when using GPS tracking, e-commerce portals, or other services that may be
available through SWANSAT.
SWANsat Development, LLC, will be tasked to manage the creation and design of
handsets and related electronic accessories and to arrange for the manufacture of handsets and
related electronic accessories.
64
SWANsat Equity, LLC, will be tasked to purchase, acquire, lease and manage real
estate holdings that SWANsat Holdings or the other business entities may require to
effectuate the business plan and to subcontract real estate agents or management firms to
accomplish said purchases, acquisitions, leases, or property management.
Fleet Holdings, LLC, will be tasked to purchase, acquire, lease and/or rent
throughout the world any and all modes of transportation that SWANsat Holdings or the
other business entities may require to effectuate the business; and to subcontract the day-today automobile rental needs of the business entities to an outside rental provider if unable to
provide such services in locations to which employees may be required to travel.
SWANsat Press Club, LLC, will be tasked to develop and maintain a news media
forum; to create a journalism medium for the distribution of breaking news events via the
SWANSAT, utilizing subscribers to relay breaking news through the use of their SWANSAT
personal information terminals to world news media; and to issue and to revoke as needed
press credentials to individuals or to journalists who are subscribers.
Banque de Commerce Internationale, LLC, will be tasked to provide financial
services that may be required; to subcontract with other banks, agents or financial management
firms throughout the world to provide banking or financial services; to manage, with the
approval of the members, all demand deposit and savings accounts into which may be received
the revenue of any of the business entities; to establish banking and savings accounts for
subscribers; to establish Visa and/or Master card accounts for subscribers; to establish a
branded Visa or MasterCard program; to originate or otherwise provide loans to subscribers;
and to originate or otherwise provide loans and financing to any of the business entities.
Fidelis Entertainment, LLC, will be tasked to develop, produce, and distribute to
U.S. and foreign theatrical markets new feature-length theatrical motion pictures; to release
said motion pictures monthly on SWANSAT as a thirty-day value-added preview feature for
subscribers; and to offer motion pictures for sale at a modest fee to the subscribers after the
30-day preview period is over.
A draft marketing plan that incorporates the above elements has been attached as
Appendix Four.
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SWANSAT
AS
CHAPTER 6:
A MODEL FOR CHARITABLE
GIVING
Even though SWANSAT represents a capital-intensive, front-end loaded commitment
of about USD$10 billion to design, construct, launch, deploy, market, and operate for its first
year of operations, once the subscriber set is fully populated, SWANSAT also represents a
significant opportunity to fund Christian ministry opportunities on a vast, international scale.
After initial costs are repaid, as much as USD$1 billion per month might one day be made
available for disbursement to the work of Christ worldwide.
Private Ownership by Charitable Trusts
Ninety percent of SWANSAT is owned by charitable trusts, and the remaining ten
percent will be converted to ownership by charitable organizations in the near future. Most of
the after-tax profits from operation of SWANSAT will be sent to the Themelios Charitable
Remainder Annuity Trust, which will in turn direct endowment funds and operational funds to
its charitable remainder beneficiaries, the SWANSAT FOUNDATION GROUP. As a consortium
of four separate, independent foundations, the SWANSAT FOUNDATION GROUP could each
separately contribute 25% of the annual operating budget of a tax-exempt, non-profit
corporation, thus enabling the recipient of the donation to continue to meet the Internal
Revenue Service regulations relating to the IRS Public Support Test.
Under the preferred scenario, the THEMELIOS CHARITABLE REMAINDER ANNUITY
UNITRUST will form THE SWANSAT FOUNDATION GROUP, a consortium of four separate
nonprofit foundations. When it has been named formally as the sole charitable remainder
beneficiary of the THEMELIOS TRUST‘s ownership in SWANsat, THE SWANSAT
FOUNDATION GROUP will administer the corpus that will be placed into THE SWANSAT
FOUNDATION GROUP’s care. The purpose of the gift to THE SWANSAT FOUNDATION
GROUP will be to equip THE SWANSAT FOUNDATION GROUP to sponsor a number of
planned charitable giving opportunities intended to bring a biblical discipline to a postChristian world on an international scale.
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Beneficiary’s Commitment to Present-Lifetime Giving
Under the preferred scenario, the Unitrust’s Grantor will craft the structure of the
Unitrust to enable release of the vast majority of the Unitrust’s corpus to the charitable
remainder beneficiary during the Grantor’s lifetime, provided that the Unitrust meet a set of
minimum support requirements to the beneficiary. The Grantor will empower the Unitrust to
release all other income that accrues to the benefit of the Unitrust for use by the charitable
remainder beneficiary.
Initial Advisors
Initial advisors to THE SWANSAT FOUNDATION GROUP‘s founder William Welty will,
of course, be subject to acceptance of the position by the candidate. Candidates will be
considered for nominations as ongoing activities of the SWANsat Project allow for expansion.
A Successor Trustee of the Unitrust has been appointed.
Gifting Areas
Without requiring involvement in any of the areas named below, the primary focus of
financial sponsorship by THE SWANSAT FOUNDATION GROUP could include at least the
following opportunities:
Financial sponsorship of independent ministries that focus on bringing the gospel of
Jesus Christ to the Muslim world, especially (but not limited to) Muslims who live in Middle
Eastern countries located near Israel. Samaritan’s Purse and Freedom Alliance have been
proposed as candidate recipients of funds that would be directed to this purpose. Candidate
organizations who might be funded to combat Muslim-based cyber-terrorism, including
shutting down of and confiscation of assets of international organizations that threaten the
security of the United States and the West, have not yet been identified.
Financial grants for the ongoing support of widows and orphans of Americans whose
primary breadwinner has been killed defending the United States and the West from Muslim
Jihads. The CIA Memorial Officers Foundation’s general fund and the Marine Corp Law
Enforcement Scholarship Foundation general fund have been proposed as candidate recipients
of funds that would be directed to this purpose.
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Financial sponsorship of efforts to combat Muslim-based terrorism within Israel
would constitute another ministry objective.
Financial sponsorship of a think tank located in Israel and dedicated to the study of
factors that have contributed to the deteriorating state of international affairs in Israel has also
been proposed, with the Themelios Institute to serve as the sponsoring agency. Renowned
Israeli and conservative political philosopher Dr. Paul Eidelberg is a candidate for direct
sponsorship by the Institute in this area of charitable giving.
Financial sponsorship of fully-endowed chairs at conservative, evangelical graduate and
post-graduate educational institutions that train Christians for national and international
ministry has been proposed.
Utilization of a portion of the SWANsat electromagnetic spectrum to distribute
interactive classes taught at graduate and post-graduate educational institutions in order to train
Christians internationally in their own home countries via interactive distance learning should
be considered a primary objective of the charitable giving efforts of SWANSAT.
Utilization of a portion of the SWANsat electromagnetic spectrum to facilitate
interactive home schooling via interactive distance learning as an alternative to education
undertaken by destructive and inefficient government (“public”) educational institutions
should also be considered in consultation with SWANSAT FOUNDATION GROUP advisors.
Sponsorship of independent ministries that care for foster children overseas, such as
Noble Purpose, a California non-profit corporation, has been proposed.
A terraforming project to repair the ecology and economy of Nauru, SWANSAT’s host
country, that was damaged through more than a century of strip mining has been requested by
the government of the Republic of Nauru.
Business Model for Optimizing Unused System Capacity
Unused SWANSAT system capacity can be outsourced to third party companies such
as SkyVault. Under such an arrangement, SWANSAT could be tasked to place unused capacity
on SWANSAT under administration of THE SWANSAT FOUNDATION GROUP. The SWANSAT
FOUNDATION GROUP would then broker donations of SWANSAT accounts, as well as
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SWANSAT bandwidth to qualified non-profit organizations. SkyVault would be paid a
percentage of the donations as a service fee.
Also, donations of full service SWANSAT accounts would be sought from the
corporate giving departments of Fortune 1000 companies. The full retail value of the accounts
could be paid to THE SWANSAT FOUNDATION GROUP as a donation, with THE SWANSAT
FOUNDATION GROUP paying a service fee for arranging the donations. Non-profit
corporations could then receive free services courtesy of American businesses.
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RISK
CHAPTER 7:
FACTORS AFFECTING SWANSAT
Forward thinking necessitates calculation of risk factors that could affect the business
success of SWANSAT.
General Risks
Because SWANSAT is a new venture, only a portion of the business risks that attend
SWANSAT can be enumerated. These risks may adversely affect the ability to realize financial
gain and/or profit from provision of services to resellers or to end user retail customers.
General risks include at least the following areas:
First, the licenses are an intangible asset. Accordingly, the value of these assets may be
insufficient to satisfy financial obligations. The value of the licenses will depend significantly
upon the success of any business plans and the growth of specialized mobile
telecommunications services.
Second, that SWANSAT is regulated by host countries could result in increased costs
or limitations on growth or strategic planning. Future changes in regulation, legislation, or
arbitrary reallocations or reassignment of broadcast rights in the W-Band by the ITU or by
other communications regulatory agencies or authorities could impose significant additional
costs, either in the form of direct out-of-pocket costs or in the form of additional compliance
obligations. For example, compliance with regulations requiring provision of caller location
services information to public safety organizations will materially increase cost of doing
business.
Third, the licenses are revocable for cause. SWANSAT could have its licenses to
operate in the W-Band revoked by its host countries. Submission of regular semi-annual
progress reports to the host countries is required, continuing through placement in orbit of the
final SWANSAT spacecraft. Failure to file any of the progress reports in a timely manner could
be a cause of revocation of licenses. If SWANSAT fails to comply with applicable regulations
of the host countries’ licensing authority, it may be subject to sanctions which may have a
material affect on business. Other than to request reinstatement of a rescinded or revoked
70
license after correction of defects that led to the rescission or revocation, SWANSAT will have
no other recourse to recover damage from a host country if that host country rescinds or
revokes its licenses. Under any and all circumstances, as a sovereign nation the host country
cannot be sued for revocation or rescission for cause of the SWANSAT licenses.
Fourth, legislative restrictions may be imposed. Some United States jurisdictions have
adopted legislation that could affect operations. For example, some jurisdictions such as the
State of New York have enacted laws restricting or prohibiting use of portable
communications devices while driving motor vehicles. Also, United States federal legislation
has been proposed that would affect funding availability to states that do not adopt similar
legislation. If similar legislation is adopted in other states, SWANSAT could experience reduced
subscriptions and demand for its service in these regions.
Fifth, unanticipated litigation is always a possibility. SWANSAT cannot be certain that
it or the wireless industry in general may not be subject to litigation should a situation arise in
which damage or harm occurs as a result of interference between a commercial licensee like
SWANSAT and a public safety licensee, such as an emergency response operator of a public
safety organization.
Risks Related to New Technologies
SWANSAT is the first business entity to be licensed to operate as a commercial
telecommunications satellite operator in the 92-95 GHz and 102-105 GHz electromagnetic
frequency bands, located in Band 11 of the Extremely High Frequency (EHF) 30-300GHz
band described in §2.101 Nomenclature of Frequencies contained in Subpart B: Allocation, Assignment,
and Use of Radio Frequencies set forth in the Rules of the Federal Communications Commission of the
United States of America. SWANSAT remains in its infancy. Even though the W-Band was
allocated for commercial users of mobile and fixed satellite services decades ago, no actual
assignment for commercial use of the W-Band was ever made until the SWANSAT host
countries granted a license for operation in the W-Band. No service is currently operational
anywhere in the world, nor will there operate any such service until approximately 2009 or
2010. No communications authority of any sovereign nation state (except the host countries)
has issued licenses for operation of any portion of the W-band frequencies, even though the
71
frequencies were allocated to the mobile satellite service years ago. Furthermore, SWANSAT
will be dependent on receiving international “landing rights” and “roaming rights” for the
SWANSAT service. By international agreement, no company may offer satellite-delivered
commercial telecommunications services for access within foreign territories without the
foreign country first having approved a “landing rights” agreement. SWANSAT cannot provide
assurances that these landing rights will be obtainable without incurring substantial expense,
the amount of which cannot be reasonably anticipated at this time.
SWANsat may be dependent upon the financial strength and/or solvency of its
roaming partners. If SWANSAT roaming partners experience financial or operational
difficulties, SWANSAT end users’ ability to roam may be impaired. In that event, the ability to
attract and retain end users who wish to utilize their own wireless telephony systems on the
network may be adversely affected. Furthermore, termination of any cross border spectrum
sharing arrangements it may develop may result in SWANSAT incurring additional costs to
replace the anticipated benefits of such arrangements.
No previous satellite design similar to SWANSAT has ever been attempted. No
telecommunications satellite of the type described, inter alia, has yet been designed, built, or
launched by any vendor. Accordingly, SWANSAT consists of new and untested
telecommunications technologies. SWANSAT has not designed, constructed, or launched any
high-power telecommunications satellites intended for operation in the proposed service.
SWANSAT cannot provide any assurance or guarantee that any of the designs, construction
techniques, and methodologies with respect to SWANSAT will function as intended.
No guarantee of successful operation of SWANSAT as designed can be implied or
offered. No assurance can be given that SWANSAT W-Band spacecraft or end user handsets
will operate as planned, designed, or built. Bluntly stated, the technology behind SWANSAT
might not work.
Ground-based and/or operational field testing or pre-launch design may indicate that
ground-based augmentation of the SWANSAT technology base may be required in order to
obtain optimal performance of SWANSAT. For example, earth-to-space return path signals
may require amplification by ground-based re-transmission equipment before transmission to
the SWANSAT spacecraft in order to enable the spacecraft to acquire the return path signals
72
originated from end users. If so, SWANSAT may not be able to deploy enough retransmission
amplifiers to attract end users in sufficient quantity to make SWANSAT a profitable concern or
to repay financial obligations incurred in constructing and deploying SWANSAT.
Concerns about health risks associated with wireless equipment may adversely affect
demand for SWANSAT services. Portable communications devices have been alleged to pose
health risks, including cancer, due to radio frequency emissions from these devices. Purported
class actions and other lawsuits have been filed against numerous wireless carriers, seeking not
only damages but also remedies that could increase the cost of doing business. We are unsure
that business and financial conditions will not be adversely affected by litigation of this nature
(even if such litigation is not filed directly against SWANSAT) or by public perception about
such health risks. The actual or perceived risk of mobile communications devices could
adversely affect SWANSAT through a reduction in subscribers, reduced network usage per
subscriber, or reduced financing available to the mobile communications industry in general.
Further research and studies are ongoing, and we cannot be sure that these studies will not
demonstrate a link between radio frequency emissions and health concerns.
SWANSAT handsets will be substantially more expensive than existing designs. Even
though this higher cost can be amortized by requiring a three-year subscription to basic
services as a condition of users receiving free use of the handsets, no assurances can be
provided that amortizing costs of the handsets in this manner will be successful. The higher
costs of handsets may make it more difficult or less profitable to attract end users.
Furthermore, the higher costs of the handsets will require SWANSAT to absorb part of the
cost of offering handsets to new end users, which may substantially reduce growth and
profitability. Furthermore, SWANSAT will be required to provide free handsets to the citizens
of SWANSAT’s host countries as a condition of licensure. However, the total number of free
handsets that might be required to be provided will not exceed 100,000 units to the host
countries.
If SWANSAT does not compete effectively, its future growth will suffer. Within the
United States of America there are at least six national wireless and broadband
communications providers. SWANSAT ability to interact effectively with these providers
depends on a number of factors, the effect of which on SWANSAT cannot be predicted.
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Customer expectations and perceptions will affect SWANSAT’s ability to attract new
customers. Customer acceptance of SWANSAT will continue to be affected by technologybased differences and by the operational performance and reliability of the SWANSAT
network. If SWANSAT does not perform at the level of customer expectation or perception—
even if those expectations or perceptions are unrealistic—SWANSAT may be unable to attract
and retain customers. Customers may perceive that SWANSAT is slow to resolve quality issues
related to the SWANSAT network if quality issues arise.
Customer expectations and perceptions could hinder acceptance of SWANSAT
technology. These expectations and perceptions could limit expansion of SWANSAT or
capacity as planned or could place SWANSAT at a competitive disadvantage. As a result,
SWANSAT could be hindered in its ability to increase subscribers. Unless SWANSAT is able to
timely and efficiently meet increased demands for service, billing, and other back-office
functions, the ability to increase the subscriber base could be affected. Furthermore, all
revenue from the first 100,000 SWANSAT accounts are required to be paid directly to the
treasuries of each of the host countries as part of the license requirements. Accordingly,
SWANSAT will not accrue revenue from account sales or services until after the first 100,000
SWANSAT accounts have been made operational for each group of seven SWANSAT
spacecraft placed into service.
Handset and accessory supply may not meet demand. SWANSAT’s ability to increase
subscribers may be partially dependent upon the ability to obtain adequate quantities of end
user handsets or other system infrastructure equipment and accessories sufficient to meet
subscriber demand. We have been unable to determine whether outsourcing supply channels
for these items will increase the ability of SWANSAT to meet demands for these items.
SWANSAT broadband, data, and internet services might not perform as anticipated.
The primary focus of the strategy is the provision of broadband, data, and internet services.
Voice Over Internet Phone (VOIP), audio, or video services are secondary to the business
plan. Unless SWANSAT’s wireless and remote broadband, data, and internet services perform
satisfactorily, are utilized by a sufficient number of subscribers, and produce sufficient levels of
end user satisfaction, ability of SWANSAT to sustain operations could be adversely affected.
Furthermore, SWANSAT’s capabilities may not allow it to perform fulfillment and other
74
customer support services more economically than its competitors or to realize a source of
future incremental revenue in order to maximize business revenue for SWANSAT.
Third party developers may fail to develop new applications for end users. Valueadded third-party enhancements of SWANSAT services may not become available quickly
enough to sustain market penetration, leading to an unsatisfactory level of end user acceptance
and utilization of the service. This resulting dissatisfaction could have an adverse effect on
operations, growth prospects, and perceived value.
“Next Generation” technologies could prove difficult or impossible to roll out to end
users. To the extent that advanced digital service protocols such as “4G” or “Next
Generation” digital technologies can be adopted to the SWANSAT technology model, an
attempt should be made to integrate them within the constraints of operations and
electromagnetic spectrum assignments to the W-band. However, significant capital
requirements will be required to implement and integrate any next generation technologies,
and SWANSAT may not be able to guarantee that these new technologies will provide the
advantages that are expected. Furthermore, the actual amount of funds required to finance and
implement these new technologies could significantly exceed estimates.
Future implementation of “Next Generation” technologies could require additional
unforeseen capital expenditures. These unforeseen capital expenditures could be incurred in
the event of unforeseen delays, cost overruns, unanticipated expenses, regulatory changes,
engineering design changes, network or systems compatibility problems, equipment
unavailability, and technological or other complications such as an inability to successfully
coordinate these new technology implementations with customer care, billing, order
fulfillment, and other back-office operations. Furthermore, some types of next generation
technologies may prove to be incompatible either with each other, with other currently
deployed technologies, or with SWANSAT technology if the type of technology chosen to be
deployed does not gain widespread acceptance or perform as expected. If any of these events
occurs, the business could be adversely affected.
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Risks Related to Launch and Operation
Risks during construction and launch to orbit may cause failure of SWANSAT. No
assurance can be provided that efforts can result, or will result in successful delivery to orbit of
the SWANSAT spacecraft. Accordingly, failure to receive delivery on orbit may occur. Even
though any contract with a vendor will require acceptance of working spacecraft “on orbit,”
i.e., with all ground station and Telemetry, Tracking, and Control facilities in operational status
and all spacecraft working at no less than approximately 90% of operational capacity,
nevertheless the Vendor may experience a launch failure that could destroy one or more
SWANSAT spacecraft, thus resulting in a delay affecting ability to commence services to
customers.
SWANSAT spacecraft may be susceptible to magnetic field disruption. Certain
members of the world’s scientific community have suggested in recent years that the earth’s
magnetic field appears to be on the verge of a magnetic polar shift, magnetic field disruption,
or magnetic field reversal. Such a magnetic polar shift, magnetic field disruption, or magnetic
field reversal could be as severe as 180°, in consequence of which the earth’s north magnetic
pole would move to the south magnetic pole, and the south magnetic field would move to the
north. If such a magnetic polar shift, magnetic field disruption, or magnetic field reversal were
to occur after launch of the SWANSAT spacecraft, the SWANSAT spacecraft might be
rendered unusable during the period of the magnetic polar shift, magnetic field disruption, or
magnetic field reversal and/or permanently thereafter. The effect of a severe magnetic polar
shift, magnetic field disruption, or magnetic field reversal on the SWANSAT spacecraft cannot
be predicted accurately. Furthermore, because the earth’s magnetic field protects satellites from
harmful solar radiation, if a solar disruption were also to occur during or after such a magnetic
polar shift, magnetic field disruption, or magnetic field reversal, the SWANSAT spacecraft
could be damaged or rendered unusable by solar radiation.
While the SWANSAT spacecraft will not be dependant upon sunlight for power and
are not susceptible to solar eclipse blackout due to the nature of their powerplant design,
nevertheless under certain circumstances the SWANSAT spacecraft may be susceptible to
anomalous solar activity. Certain members of the world’s scientific community have suggested
in recent years that unpredictable, but natural variations in the sun’s output may create a
76
catastrophic increase in solar radiation, in sunspot activity, in solar flares, and/or in solar wind
(i.e., in charged particles emitted by the sun during periods of solar flare activity). These
catastrophic solar radiation increases could damage SWANSAT spacecraft, especially if such
increases in solar radiation, sunspot activity, solar flares, and/or solar wind were to occur
during a magnetic polar shift, magnetic field disruption, or magnetic field reversal. If
anomalous solar disruptions were to occur, the SWANSAT spacecraft may be rendered
unusable during the period of the solar disruption and/or permanently thereafter. The effect
of solar radiation output on the SWANSAT spacecraft cannot be accurately predicted.
Risks Related to Funding
SWANSAT will be dependent upon pre-launch financing. Accordingly, any ability to
fulfill obligations will be fully dependent upon the ability to secure pre-launch financing
adequate to design, construct, launch, and place into geosynchronous orbit the SWANSAT
constellation; to secure pre-launch financing adequate to design, construct, and operate
affiliated ground-based uplink and stationkeeping systems; to secure pre-launch financing
adequate to design, construct, and market ground-based end user consumer transceivers; and
to fund development and deployment of marketing and public awareness campaigns.
SWANSAT will rely on pre-launch agreements for funding in order to obtain cash flow
needed to finance business plans and to obtain investment financing arrangements with
various potential strategic partners of interest. Consequences of the failure to obtain prelaunch funding could include failure of the SWANSAT system. Even if SWANSAT enters into
an agreement to accept investment funds, if SWANSAT fails to enter into enough pre-launch
agreements adequate to fund the business plan, or if SWANSAT fails to obtain financing
arrangements with various other potential strategic partners in sufficient financial strength to
fund the business plan, then SWANSAT will fail in its plans to complete the design, construct,
launch, and placement into geosynchronous orbit of its satellites. Furthermore, SWANSAT will
then also fail with respect to design, construction, and placement into operation of its affiliated
ground-based uplink and stationkeeping systems. If any of these contingent events occurs,
including failure to obtain complete pre-launch business development funding in the amount
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of about USD$10 billion, SWANSAT will be unable to provide service to its customers and
thus customers will be unable to receive the service contracted for by any agreement.
Any SWANSAT spacecraft construction contract brings significant debt to the venture,
representing a capital-intensive, front-end loaded funding commitment requirement of up to
USD$6 billion for seven spacecraft to be designed, built, launched, and placed into
geosynchronous orbital slots (GSO’s), starting from 4.5 to 10.5 years from commencement of
construction, delivered on one year centers. An additional funding commitment of another
USD$4-6 billion may be needed to deploy another set of seven SWANsat spacecraft in order
to fulfill secondary license obligations. All funds due and payable to the vendor in payment of
construction contract must be paid in full six months prior to launch of the first spacecraft for
each set of seven SWANSAT spacecraft.
Substantial other costs will be incurred besides spacecraft deployment costs. Additional
funds in the amount of approximately USD$4 billion will be needed to develop and implement
marketing plans and in designing, constructing, and deploying SWANSAT end-user handsets.
SWANsat may prove unable to generate sufficient cash flow to meet its debt service,
working capital, capital expenditure, or other cash needs. SWANsat may be unable to continue
to generate sufficient cash flow from its internal business operations to support its growth and
continued operations.
SWANSAT’s long term cash needs may exceed its ability to fund operations. For
example, the contract with any spacecraft vendor will represent a debt payable in the amount
of about USD$6 billion; this will greatly exceed annual cash flows from initial operating
activities. If SWANSAT proves unable to raise additional financing, it may not be able to
expand and enhance its network, its wireless voice capacity, its enhanced data services, or
deploy its next generation mobile wireless services. Furthermore, it may not be able to
maintain anticipated or hoped-for levels of growth, to meet debt service requirements, or to
pursue strategic acquisitions or other opportunities that might otherwise increase
electromagnetic spectrum or license holdings.
Delay or abandonment of development could occur. Failure to achieve in a timely
manner any goals could result in the delay or abandonment of some development, expansion,
acquisition plans, and expenditures, any of which occurrences could have an adverse effect.
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Also, limitations on access to funding may adversely affect the ability to create or access a
credit line. Accordingly, access to funding may be limited by the terms of financing
agreements, including restrictive covenants; existing debt service requirements; market
conditions affecting the telecommunications industry in general; terms of options and other
convertible securities that may be issued to others and that may make equity financings more
difficult; potential commercial opportunities and risks associated with implementation of the
business plan; market perception of performance, competence to perform, and assets; and/or
the actual amount of cash needed to pursue its business strategy.
SWANSAT may become limited in how it conducts business. Restrictions may be
imposed on it through its financing arrangements that cause it to be unable to raise additional
financing or to compete effectively with respect to its emerging technologies or to take
advantage of new business opportunities. This may affect the ability to generate revenues and
profits. SWANSAT may become restricted in its ability to incur or guarantee additional
indebtedness, including additional borrowing under existing financing arrangements; to pay
dividends or to make other distributions; to pre-pay any subordinated indebtedness; to make
additional investments or other restricted payments; or to sell company assets.
Restrictions imposed by financiers may adversely affect operations. SWANSAT may be
required to maintain specified financial ratios and to satisfy specific financial tests. Any inability
to meet these ratios and other tests could result in a default under credit facilities, which could
then have a material adverse effect on SWANSAT because it could then be required to repay all
amounts then outstanding, unless negotiation, amendment, or waiver of the restrictions can be
obtained. There can be no assurance that SWANSAT would be able to obtain such
amendments or waivers.
Some of SWANSAT’s competitors may limit SWANSAT’s ability to compete. Because
of their resources and, in some cases, their ownership by larger companies, some companies
that perceive themselves to be competitors to SWANSAT may be able to offer services at
prices that are below the prices that SWANSAT can offer for comparable services, even those
other comparable services are not performed through operations in the W-band. If SWANSAT
cannot compete effectively based on the price of the service that it offers, revenue and growth
may be adversely affected.
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Risks Related to Securities Laws
SWANSAT’s management should make a safe harbor claim for forward-looking
statements. Even though SWANSAT should remain privately held and have no plans to
become a publicly-held company, the United States Securities and Exchange Commission may
hold that certain SWANSAT business proposals (such as a plan to offer licenses for the
marketing of exclusive sales territories on a world-wide basis) could be described as
unregistered securities. Because the Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements made by companies or on their behalf, SWANSAT
should claim the protections provided by the Act. For example:
Forward-looking statements might include estimates and guesses. SWANSAT, together
with its representatives, may from time to time make written or oral statements that are
“forward-looking,” including statements contained in filings or reports which are not historical
or current facts but which deal with potential future circumstances and developments. These
can be identified by the use of forward-looking words such as “believes,” “expects,” “plans,”
“may,” “will,” “would,” “could,” “should,” or “anticipates,” or other comparable words, or by
discussions of strategy that involve risks or uncertainties. These forward-looking statements
are only predictions, which are subject to risks and uncertainties, including technological
uncertainties, financial variations, changes in regulatory environments, industry growth, and
trend predictions. SWANSAT will be unable to update publicly or revise many forward-looking
statements. The operation and results of the business may be subject to the effect of other
such risks and uncertainties.
Forward-looking statements may be included in press releases or other
announcements. News releases and other public documents, including contents of web sites,
may include “forward-looking statements” within the meaning of securities laws. These
statements regarding the business outlook and expected performance as well as other
statements that are not historical facts may be defined as forward-looking statements. The
words “estimate,” “project,” “intend,” “expect,” “believe,” and similar expressions identify
forward-looking statements. Forward-looking statements are estimates and projections
reflecting management’s judgment and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the forward-looking
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statements. With respect to these forward-looking statements, SWANSAT will have made, of
necessity, assumptions regarding, among other things, customer and network usage, customer
growth, pricing, costs to acquire customers and to provide services, the timing of various
events and the economic environment.
Important factors that could cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include, but are by no means limited
to, the following: extent and duration of any current or future economic downturn; effects of
vigorous competition in the markets in which SWANSAT operates or intends to operate; costs
and business risks associated with providing new services and entering new markets necessary
to provide nationwide or global services; adverse change in the ratings afforded debt securities
by ratings agencies; ability to continue to grow a significant market presence; ability to improve
profitability and reduce cash requirements; effects of mergers and consolidations within the
telecommunications industry and unexpected announcements or developments from others in
the telecommunications industry; uncertainties related to the outcome of bankruptcies
affecting the telecommunications industry; impact to network coverage due to financial
difficulties of third-party affiliates; uncertainties related to investments; impact of any unusual
items resulting from ongoing evaluations of SWANSAT business strategies; impact of new,
emerging and competing technologies on SWANSAT’s business; unexpected results of
litigation filed against SWANSAT; the possibility of one or more of the markets in which
SWANSAT competes being impacted by changes in political or other factors such as monetary
policy, legal and regulatory changes including the impact of the Telecommunications Act of 1996,
or other external factors over which SWANSAT has no control.
Even those forward-looking statements may be reasonable; however, repeated
reminders will need to be made that undue reliance should not be placed on forward-looking
statements, especially those which are based on expectations that were current as of the time
of the forward-looking statement and speak only as of the date of the release of the statement.
SWANSAT should not be obligated to release publicly any revisions to forward-looking
statements to reflect the effect of later events on the forward-looking statements.
81
Risks Related to General Economic Development
Additional risks and uncertainties exist, but are by no means limited to at least the
following: extent and duration of any current or future economic downturn; general economic
conditions in the geographic areas and occupational market segments that SWANSAT plans to
target for its digital mobile network service; availability of adequate quantities of system
infrastructure and handset equipment; availability of adequate quantities of components to
meet service deployment plans, marketing plans, and customer demand; availability and cost of
acquiring additional spectrum; timely development and availability of new handsets with
expanded applications and features; success of efforts to improve, and satisfactorily address
any issues relating to digital mobile network performance; successful implementation and
performance of SWANSAT technology being deployed or to be deployed in various market
areas; market acceptance of SWANSAT technology; timely delivery and successful implementation of new technologies that may be deployed with any future SWANSAT technologies
offerings; ability to achieve market penetration and average subscriber revenue levels sufficient
to provide financial viability to the business; the impact on the cost structure or service levels
caused by any general downturn in the telecommunications sector, including adverse effect of
any bankruptcy of the vendor or other suppliers; SWANSAT’s ability to successfully scale
certain outsourcing arrangements, billing, collection, customer care, or other similar backoffice operations in order to keep pace with customer growth, increased system usage rates
and growth in levels of accounts receivables being generated by end users; the ability of
SWANSAT to access sufficient debt or equity capital to meet operating and financial needs; the
quality and price of similar or comparable wireless communications services offered or to be
offered by competitors, including providers of cellular and personal communication services;
the impact of legislation or regulatory actions relating to specialized mobile radio services,
wireless communications services, or general telecommunications, including, for example, the
impact of number portability on business; costs of compliance with regulatory mandates,
including location-based 911 capabilities; and other risks.
82
Risks Related to ITU Status
SWANSAT’s Grant of Authorizations issued by the Republic of Nauru contains six GSO
orbital slots, plus provision for a seventh functional, but non-operational, on-orbit spare
spacecraft. Even though SWANSAT files an Advanced Publication Information (API)
statement concerning SWANSAT with the ITU, and even though SWANSAT’s ability to
operate on a first commercial use basis is protected in accordance with the Rules of the ITU,
nevertheless, due to regulatory procedural limits inherent within the ITU’s API Rules, only the
first three SWANSAT spacecraft can be registered at this time. The remaining SWANSAT
spacecraft can only be registered annually on a one-at-a-time basis as the Rules permit.
83
CHAPTER 8:
VALUATION, COST, AND REVENUE
ESTIMATES
Methods for Determining Estimate of Economic Value of Operational System
An estimate of the range of values for the business opportunity represented by
SWANSAT is affected by six main elements:
The economic par value of the W-band electromagnetic frequency
assignments
The value of the seven SWANSAT spacecraft delivered to geosynchronous
orbit
The value of operational geosynchronous orbital slots assigned
The value of the license authorizations themselves
The value of the intellectual property set represented by the unique and
proprietary SWANSAT business model
The value of a potential subscriber base of 10 million users for each
spacecraft
Of these elements, the first five can be readily estimated. Because SWANSAT has not yet
been placed into operation, an evaluation for the potential subscriber base for SWANSAT
can be estimated only as a theoretical value.
Evaluation Methodology: Range of Valuations
The range of valuations of these elements varies. The valuation parameters are limited
by evaluation standards set by competing forces within the telecommunications industry. The
methodology by which the elements noted above are valued is affected by the following
considerations:
First, we estimate the value of the 6,000 MHz electromagnetic frequency assignment
for SWANSAT by comparing them to the benchmark value range set by the FCC in its 1996
84
auction of a several dozen 24 MHz assignments in the Part 100 Direct Broadcast Service. That
range is from a low of USD$250,000 per 24 MHz increment at 175° West Longitude (paid by
EchoStar’s DISH Network) to a high of a about USD$1 million per 24 MHz transponder
increment at 110° West Longitude (paid by MCI Communications). However, these values
were obtained from auctions of assignments in the 19.2-19.6 GHz Ku-band, not the W-band
that pertains to SWANSAT.
Second, the value of the seven SWANSAT delivered to orbit is affected mainly by their
cost (about USD$6 billion for all seven spacecraft if they are all ordered and built at the same
time), and by their expected on-orbit life, which will be about 25 years.
Third, we value the six orbital slots assigned to SWANSAT by comparing them to the
value set by Charlie Ergen, Chairman and CEO of EchoStar Communications’ DISH
Network. Mr. Ergen has been widely quoted as valuing each 24MHz transponder delivered to
geosynchronous orbit at about US$18 million.
Fourth, we apply no valuation set to the license authorizations assigned to SWANSAT.
This allows a conservative financial estimate to be maintained.
Fifth, we apply no valuation to the intellectual property set represented by the unique
and proprietary SWANSAT business model.
Sixth, because the US-based cable industry values its subscribers at about USD$2,500
per subscriber, we apply a similar valuation to a fully populated customer set.
The Business Opportunity Represented by SWANsat
We set the following range of valuations for the elements noted above as follows:
First, if the value of the electromagnetic frequency assignment is estimated on a base
of USD$1 million for each of the 6,000 MHz (3 GHZ at 92-95 and 3 GHZ at 102-105 GHz)
in the assignment, a minimum valuation may be set at USD$6 billion per GSO assignment.
However, due to frequency multiplication obtained by use of right-hand and left-hand
polarization, we may claim 12,000 MHz for the spectrum value estimation, resulting in our
estimate of the value of USD$12 billion for each of the six operational GSO slots, for a total
valuation of USD$72 billion for the frequencies.
85
Second, we estimate the value of the seven SWANSAT spacecraft delivered to orbit at
their cost, which is USD$6 billion.
Third, we set the value of the six operational geosynchronous orbital slots by
employing the valuation methodology set by DISH Network, which is USD$18 million per 24
MHz. Employing this methodology, the SWANSAT transponder capacity is estimated at about
USD$9.0 billion for each of the six 12,000 MHz of usable bandwidth assignments. Because
SWANSAT’s comparable frequency allocation is about equivalent to 500 DBS transponder
allocations for each orbital slot assigned, and because six orbital slots have been assigned to
SWANSAT, accordingly, the value of SWANSAT’s orbital slots may be estimated at about
USD$54 billion.
Fourth, we set a value for the licenses at zero for the purposes of this evaluation
because we are unaware of any existing valuation methodology for the licenses.
Fifth, at USD$2,500 per subscriber, we estimate the SWANSAT subscriber base (if
fully populated at 10 million users per spacecraft) at USD$25 billion for each of the six
operational spacecraft for a total value for the subscriber base at USD$150 billion.
Sixth, we set a value for the to the intellectual property set represented by the unique
and proprietary SWANSAT business model at zero for the purposes of this evaluation because
we are unaware of any existing valuation methodology for the licenses.
Adding these figures together, we estimate the maximum value of a completed and fully
subscribed SWANSAT System at USD$282 billion, when it has been delivered to orbit, accepted
from the vendor for full operations, and characterized by a full population of 60 million
subscribers. This valuation includes the value of the frequency allocations in the W-band, the
value of the SWANSAT constellation as delivered to orbit, the value of the subscriber base, the
value of the six geosynchronous orbital slots, but not the value of the licenses themselves, the
cost of delivering the SWANSAT constellation to orbit, or the value of the SWANSAT business
model or intellectual property set. Our evaluation of the value of SWANSAT may be estimated
from a low of USD$132 billion exclusive of a fully populated subscriber base to a maximum of
USD$282 billion for a fully populated subscriber base of 60 million users, excluding the
USD$6 billion expense for delivery to orbit of the SWANSAT constellation, which should be
subtracted from both estimates.
86
Summary of Pre-Launch Costs
Pre-launch costs may be delineated in only two categories: costs associated with design,
construct, and delivery to orbit of the SWANSAT space segments, and costs associated with
design, construction, marketing, and deployment of the SWANSAT earth segment. A firm,
fixed estimate can be obtained from the SWANSAT space segment vendor in the approximate
amount of USD$6 billion, with a need for another USD$4 estimated as set forth in the table
below
SWANsat Cash Flow Analysis
Year # Spacecraft Deliveries
Marketing Expenses
Year 1
1,500,000,000
$500,000,000
Year 2
1,300,000,000
$700,000,000
Year 3
1,300,000,000
$700,000,000
Year 4
1,200,000,000
$800,000,000
Year 5
700,000,000
$1,300,000,000
Totals
6,000,000,000
$4,000,000,000
A spread sheet containing a expense and income pro forma projection is attached as Appendix
Two.
Private Placement Memorandum
Risk mitigation may be accomplished by dividing the estimated USD$10 billion cost
associated with design, construct, and delivery to orbit of the SWANSAT space segments and
construction and deployment of the SWANSAT earth segment among ten separate limited
partnerships, each of which would be responsible for raising its proportionate share of the
expenses. A representative private placement memorandum has been developed in draft form
and is attached as Appendix Three.
87
CHAPTER 9:
A PRACTICAL METHODOLOGY
CRAFTING SWANSAT
FOR
The proposed methodology for crafting a working SWANSAT system is to file
Applications for Assignment of W-Band Frequencies, for Geosynchronous Orbital Slot Assignments, for
Launch Authorisations, and for Licenses to Operate Space Stations before the telecommunications
authorities of candidate host countries. The candidates must be signatories to ITU treaties.
The government of Tuvalu and the Republic of Nauru were approached in late 2002 and early
2003 as candidate host countries. The Applications for Assignment were granted in May 2003 and
March 2004, respectively. Five specific authorizations were sought and granted:
First, twenty-five year renewable assignment of operational electromagnetic
frequencies at 92-95 GHz and at 102-105 GHz in the “W-band” for delivery of hybrid mobile
and fixed satellite services via SWANSAT were sought.
Second, twenty-five year renewable assignments to geosynchronous orbital slots for
the telecommunications spacecraft that will comprise the space segment of SWANSAT were
requested.
Third, launch authorizations to deliver identical SWANSAT high-powered
telecommunications satellites to the geosynchronous orbital slots were requested, along with
an on-orbit spare SWANSAT spacecraft that will be placed into a geosynchronous storing orbit
for use if one of the spacecraft sustains an anomaly or other on-orbit failure that renders it
unusable.
Fourth, twenty-five year renewable licenses to operate each of the SWANSAT space
stations were requested.
Sixth, permanent license for customers to access SWANSAT through operation of bidirectional mobile earth station handsets were requested, including operation on board
commercial aircraft.
An election was made to file an amendment to the second application that was
granted, seeking offset of the second orbital allocation assignment by sixty degrees from the
first, thus doubling operational capabilities and allowing both nations to benefit equally from
88
the technologies that will be deployed by SWANSAT. Accordingly, a total of six initial
geosynchronous orbital slots (GSO’s) were requested and were granted, with another six
secondary GSO’s pending approval current of the date of this writing.
Proposed Geostationary Satellite Orbital Location
We proposed initial geosynchronous orbital (GSO) positions at these locations:
Geosynchronous orbital slots for SWANSAT ™ granted by Republic of Nauru on 8 March 2004. TOP LEFT: Euro-African
theater at 30° East Longitude. TOP CENTER: Asian theater at 90° East Longitude. TOP RIGHT: Western Pacific theater
at 150° East Longitude. BOTTOM LEFT: Central Pacific theater at 210° East Longitude. BOTTOM CENTER: Americas
theater at 100° West Longitude. BOTTOM RIGHT: Atlantic theater at 30° West Longitude.
We proposed to place the first SWANSAT spacecraft into operation at orbital slot 100° West
Longitude because it provides a view of the Americas Telecommunications Theater
consistent with access to SWANSAT’s ground station. The downlink beam pattern generated
by SWANsat is fully circular—it covers the entire hemisphere from any GSO slot into
which the SWANSAT spacecraft may be placed. Subsequent launches will deliver the
remaining SWANSAT constellation first to 30° West Longitude and then to 150° East
89
Longitude, then to the remaining orbits. The spare SWANSAT spacecraft in a
geosynchronous sparing orbit nominally ±0.2° of its 100° West Longitude assignment. On 4
June 2004, we invited the Government of Tuvalu to modify its GSO assignments to
authorize operations from 0° East Longitude, 60° East Longitude, 120° East Longitude,
180° East Longitude, 60° West Longitude, and 120° West Longitude. If the Government of
Tuvalu grants this request, the total SWANsat GSO assignment allocation will be as follows:
TOP ROW: Nauru Licensure: Euro-African theater at 30° East Longitude; Asian theater at 90° East Longitude; Western
Pacific theater at 150° East Longitude; Central Pacific theater at 210° East Longitude. MIDDLE ROW: Nauru Licensure:
Americas theater at 100° West Longitude; Atlantic theater at 30° West Longitude; Tuvalu Licensure: Greenwich theater at
0° East Longitude; Middle East theatre at 60° East Longitude; BOTTOM ROW: Tuvalu Licensure: Australian theater at
120° East Longitude; Pacific theater at 180° East Longitude; Western Americas theater at 120° West Longitude; Central
Atlantic theater at 60° West Longitude.
Telemetry, Tracking, and Command
SWANSAT will require a single earth station for telemetry, tracking, and command
(“TT&C”) and programming services provided. The satellites will be capable of being
90
launched by one of the currently available commercial launch vehicles. The ground segment
will consist of three components:
Earth stations to perform the necessary TT&C functions for the spacecraft;
and,
An operations control center that will integrate the terrestrial and space
segments of SWANSAT; and,
Transmit/receive earth stations (i.e., end user hand sets) that will provide
communications services.
Each individual user will be able to acquire SWANSAT as a customer, receiving data from
and transmitting data to the SWANSAT spacecraft. SWANSAT can accommodate up to
twelve million simultaneous users per spacecraft.
SWANSAT’s TT&C station will include at least two 4-meter antennas, a 30 GHz
transmitter, and a 20 GHz receiver. All communications will be controlled and monitored by a
Satellite Network Operations Center (“SNOC”) which will maintain and optimize the
configuration of the satellites in order to ensure maximum availability during peak traffic
periods. The SNOC will be located at a location determined by the vendor, but most likely will
be co-located with the SWANSAT earth station. Among other functions, the SNOC will allow
end users to request and reserve call and conference setups, will provide authorization and
access to the satellites, and will monitor and analyze service performance with respect to
utilization, outages, blocking time, and other functions. The TT&C sites will receive and
transmit customer service traffic as needed.
Frequency Use and Re-use
We propose to perform communications in the 92.0 GHz to 95.0 GHz (uplink) and
102.0 GHz to 105.0 GHz (downlink) frequency bands. Tracking, telemetry, and control
(“TT&C”) functions will be performed in the 92.0 GHz to 95.0 GHz band. Because
SWANSAT will operate in frequency bands far above any operating, proposed, or authorized
telecommunications satellite system, SWANSAT will be fully compatible with any currently
operating or authorized space station operating within 2° of SWANSAT proposed orbital
91
allocations. SWANSAT not interfere with any proposed, operating, or authorized space station.
The uplink portion of SWANSAT will utilize 3,000 MHz from 92 GHz to 95 GHz for mobile
satellite services. The downlink portion will utilize 3,000 MHz from 102 GHz to 105 GHz of
the spectrum for mobile satellite services. Frequency re-use and multiple polarization schemes
will allow for optimal use of the W-band. We proposed that a laser-based communications
subsystem will be placed onboard each spacecraft to facilitate inter-satellite communications
with other SWANSAT spacecraft that will follow-on the first SWANSAT spacecraft, which will
be placed into service at 100° West Longitude.
Orbital Accuracy Proposed
We proposed that orbital inclination will be maintained within an accuracy of
±0.005%. Antenna axis attitude will be maintained within an accuracy of ±0.05%.
Longitudinal drift will be maintained within an accuracy of ±0.05%.
92
BIBLIOGRAPHY
The Telecommunications Information Exchange Service (TIES) of the International
Telecommunication Union publishes a number of confidential reports to member sovereign
nation states to which we were granted access as part of the Republic of Nauru’s association
with the ITU. Authorship attribution remains anonymous pursuant to ITU policy because the
works are considered the end product of various working groups and not the accomplishment
of specific individuals. Accordingly, no authorship attribution can be made for the works cited
below. The following member documents were helpful, but were not directly quoted in this
dissertation due to ITU security concerns:
Data Capture Software for Preparation of Digital Broadcasting Requirements to be Used for the Planning
Exercise and for the Development of a Draft Plan for the Second Session of the Regional
Radiocommunication Conference for the Planning o Digital Terrestrial Broadcasting Service in Parts of
Regions 1 and 3, in the Frequency Bands 174-230 MHz and 470-862 MHz (1 September 2004)
Free Access to ITU-T Recommendations (September 2004)
Implementation of Cost Recovery for Satellite Network Filings (23 June 2004)
Report on ITU-T’s Cyber-Security Symposium (6 October 2004)
Sharing Between Point-to-Point and Point-to-Multipoint FS and Transmitting Earth Stations of GSO and
Non-GSO FSS Systems in the 27.5-29.5 GHz Band (4 August 2003)
Signalling Requirements to Support “IP Telephony” (24 March 2004)
Studies for the Use of Spectrum at Frequencies above 3,000 GHz (24 September 2004)
Study Group on Next Generation Networks (October 2004)
Technology Developments and Application Trends in the Fixed Service (September 2004)
93
INDEX
OF
SUBJECTS
A
F
Advanced Publication Information
82
Application for Authorizations
11, 23
auctions
21, 84
FCC
v, vi, 12, 20, 21, 23, 83
Federal Communications CommissionSee
FCC
Fidelis Entertainment
64, 65
Fleet Holdings
65
Forward-looking statements
79
Frequency auctions
24
Frequency Use
90
FSS
vi, 23
B
Banque de Commerce Internationale
65
business productivity information
14
C
G
CAD/CAM
17
C-band
9
CD-Rom imaging
17
Charlie Ergen
21, 84
Christian ministry opportunities
66
CODECing
iii, vii, 1
conferencing services
2, 15, 17
convergence
1, 4
Gifting Areas
GSO
H
Hughes DirecPC™
12
I
IMT-2000
v, 1, 3
IMT-2000+
1
information
6
International Telecommunication Union
vi, 23
internet2
1, 6, 18
D
data
6
DBS
iii, v, vi, 2, 15, 18, 21, 85
Department of Defense
53
Digital radio
17
Digital Telesthetics
v, 10, 16
Direct Broadcast Service
iii, v, 1, 84
DirecTV
iii, v, 21
discretionary information
14
DISH Network
21, 84, 85
DSL
2, 18
J
Jihads
67
K
Ka-band
Ku-band
E
EchoStar
e-commerce
educational programming
Expressway™
67
vi, 23, 77, 82, 84, 88
v, 21, 84
3, 6, 64
6
12
9, 12
v, 9, 84
L
LANS
leisure information
Limited Partnerships
94
9
14
54, 55
LMDS
vi, 1, 21
SkyVault Technologies
19
SNOC
vi, 90
St. Kitts and Nevis
23
streaming media
7
Subscriber Account Territories 53, 54, 61
SWANsat Development
64
SWANsat Equity
65
SWANSAT FOUNDATION GROUP 66, 67,
68, 69
SWANsat Holdings 54, 61, 62, 63, 64, 65
SWANsat Information Systems
64
SWANsat Marketing
63, 64
SWANsat Press Club
65
M
MCI
21, 84
MCI Communications
21, 84
membership approach to
telecommunications
10, 11
messaging and distribution services.
These multimedia services can be
symmetrical
3
MSS
vi, 23
N
Nauru
23, 58, 68, 82, 87
New Technologies
71
Next Generation
75
Norris Satellite Communications
12
T
Telemetry, Tracking and Control
53
Telesthetics
v, 16
THEMELIOS CHARITABLE REMAINDER
ANNUITY UNITRUST
66
Themelios Institute
68
THEMELIOS TRUST
66
Time-Casting
14
Top Level Domains
55
Trusted information Utility
19
Trusted Network Community
19
TT&C
89, 90
Tuvalu
23, 59, 87, 89
O
on-demand telecommunications
8
P
Paradigm Shifts
5
POTS
vi, vii, 11
pre-launch agreements
76
Private Placement Memorandum
86
Private Securities Litigation Reform Act
of 1995
79
U
Unused System Capacity
R
68
V
Risks
70, 71, 76, 79, 81, 82
Rules for Space Stations Applications in
the W-Band
23
VoIP
VSAT
vii, 2
17, 18
S
W
Satellite Network Operations Center 90
SATs
53, 55
Securities and Exchange Commission 79
Securities Laws
79
shared risk
21, 24
WANS
9
W-band vi, 9, 13, 23, 53, 71, 75, 78, 83,
84, 85, 87, 91
Wi-Fi
6
95
APPENDIX ONE:
SPREADSHEET PRO FORMA
SWANsatCashFlow8.xls - Network Portrait
1
2
3
4
5
6
7
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21
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27
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76
77
7/14/2004 at 6:00 PM
A
B
C
SUBSCRIBERS
Year 1 of Satellite Construction
Months ===>
Jan-05
Feb-05
SUBSCRIBERS
1
2
SWANmail:
20,000
20,000
SWANsat:
0
0
New Subscribers:
20,000
20,000
Cumulative Total of Subscribers:
20,000
40,000
INCOME
Direct Sales
SWANmail:
$400,000
$400,000
SWANsat:
$0
$0
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$400,000
$400,000
EXPENSES
SWANsat Build/Operations
IOSTAR/SWANsat and/or TT&C:
$1,500,000,000
$0
Allocations and Fixed Fees
Traunch Fee:
$40,000,000
$0
Host License:
$2,000,000
$0
LET License:
$32,500,000
$0
Fidelis:
$25,000,000
$0
Subtotal:
$99,500,000
$0
Marketing
Sales Overhead Allocated:
$3,337,500
$3,337,500
Salaries Overhead Allocated:
$3,337,500
$3,337,500
Media Buys Allocated:
$26,700,000
$26,700,000
Subtotal:
$33,375,000
$33,375,000
Marketing Sales Overhead:
Marketing Salaries Overhead:
Marketing Media Buys:
LET License:
Merchant Processing:
Fidelis Fee:
General Partner Fee:
Subtotal:
Other Expenses
Network Replacement Sinking Fund:
Other Expenses
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
1 of 20
D
E
F
May-05
5
20,000
0
20,000
100,000
Jun-05
6
20,000
0
20,000
120,000
CUMES
Months 1-6
120,000
0
120,000
120,000
$400,000
$0
$0
$0
$400,000
$400,000
$0
$0
$0
$400,000
$400,000
$0
$0
$0
$400,000
$400,000
$0
$0
$0
$400,000
$2,400,000
$0
$0
$0
$2,400,000
$0
$0
$0
$0
$1,500,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$32,500,000
$25,000,000
$99,500,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$20,025,000
$20,025,000
$160,200,000
$200,250,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$4,200
$6,000
$10,200
$4,200
$6,000
$10,200
$4,200
$6,000
$10,200
$4,200
$6,000
$10,200
$25,200
$36,000
$61,200
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$400,000
$33,665,200
($33,265,200)
$400,000
$33,665,200
($33,265,200)
1
2
Revenue:
$1,200,000
$1,200,000
Expenses:
$1,700,495,600
$100,995,600
Net Profit/(Loss)
($1,699,295,600)
($99,795,600)
3
$1,200,000
$100,995,600
($99,795,600)
4
$1,200,000
$100,995,600
($99,795,600)
Annual Recap
$12,600
Satellite Construction
1
Revenue:
$4,800,000
Expenses:
$2,003,482,400
Net Profit/(Loss)
($1,998,682,400)
$12,600
2
$9,600,000
$2,006,964,800
($1,997,364,800)
`
3
4
$12,600
3
$14,400,000
$2,010,447,200
($1,996,047,200)
IRR
($10,000,000,000)
$9,592,845,000
$10,834,500,000
$10,834,500,000
$10,834,500,000
$10,834,500,000
86%
86%
86%
95%
99%
NPV
($10,000,000,000)
($407,155,000)
$10,427,345,000
$21,261,845,000
$32,096,345,000
$42,930,845,000
5
$400,000
$33,665,200
($33,265,200)
6
$400,000
$33,665,200
($33,265,200)
$2,400,000
$1,801,491,200
($1,799,091,200)
$12,600
4
$28,800,000
$2,020,894,400
($1,992,094,400)
$50,400
$100,800
$151,200
IRR & NPV
Pre/Post Launch Comparison
Construction
Operation
Revenue:
$100,800,000
$115,286,000,000
ROI: 529%
Expenses:
$10,073,130,400
$62,355,155,000
Investor's ROI
Net Profit/(Loss)
($9,972,330,400)
$52,930,845,000
Over All Years: 159%
Sinking Fund in Year 16
$1,058,400
$2,105,005,000
$4,258,563,400
Internal Rate of Return
Total Invested:
Profit/(Loss) Year 6:
H
Apr-05
4
20,000
0
20,000
80,000
$4,200
$4,200
$6,000
$6,000
$10,200
$10,200
SUMMARY INFORMATION
Profit/Loss
1
2
Revenue:
$400,000
$400,000
Expenses:
$1,633,165,200
$33,665,200
Net Profit/(Loss)
($1,632,765,200)
($33,265,200)
Quarterly Recap
G
Mar-05
3
20,000
0
20,000
60,000
96%
108%
108%
108%
108%
$302,400
5
$43,200,000
$2,031,341,600
($1,988,141,600)
$453,600
Note: These returns assume that expenses as a percent of sales and/or as fixed expenses are
LET License:
Merchant Process:
Fidelis Fee:
Marketing Fee:
Accounts Cap:
Telemetry, Command & Control:
Average Ad Budget (Years 6-10):
Total Investment Required:
6.5%
3.5%
5.0%
5.0%
30.0%
20,000,000
$25,000,000
$1,541,318,400
$10,000,000,000
(royalty to LET)
(credit card fees)
(programming)
(fees per PPM)
(advertising )
(Accounts Cap)
SNOC fees)
Proctor & Gamble
spends $3 BILLION
annually in ads)
7/14/2004 at 6:00 PM
I
J
K
A
1
SUBSCRIBERS
2
Months ===>
Jul-05
Aug-05
Sep-05
3
SUBSCRIBERS
7
8
9
SWANmail:
20,000
20,000
20,000
4
SWANsat:
0
0
0
5
New Subscribers:
20,000
20,000
20,000
6
140,000
160,000
180,000
7
INCOME
8
9 Direct Sales
SWANmail:
$400,000
$400,000
$400,000
10
SWANsat:
$0
$0
$0
11
Activation Fees:
$0
$0
$0
12
$0
$0
$0
13 Other Income
Total:
$400,000
$400,000
$400,000
14
EXPENSES
15
16 SWANsat Build/Operations
$0
$0
$0
17
18 Allocations and Fixed Fees
Traunch Fee:
$0
$0
$0
19
Host License:
$0
$0
$0
20
LET License:
$0
$0
$0
21
Fidelis:
$0
$0
$0
22
Subtotal:
$0
$0
$0
23
24 Marketing
$3,337,500
$3,337,500
$3,337,500
25
$3,337,500
$3,337,500
$3,337,500
26
$26,700,000
$26,700,000
$26,700,000
27
Subtotal:
$33,375,000
$33,375,000
$33,375,000
28
29
$12,000
$12,000
$12,000
30
$12,000
$12,000
$12,000
31
$96,000
$96,000
$96,000
32
LET License:
$26,000
$26,000
$26,000
33
$14,000
$14,000
$14,000
34
Fidelis Fee:
$100,000
$100,000
$100,000
35
$20,000
$20,000
$20,000
36
Subtotal:
$280,000
$280,000
$280,000
37
38 Other Expenses
$4,200
$4,200
$4,200
39 Network Replacement Sinking Fund:
Other Expenses
$6,000
$6,000
$6,000
40
$10,200
$10,200
$10,200
41
SUMMARY INFORMATION
42
7
8
9
43 Profit/Loss
Revenue:
$400,000
$400,000
$400,000
44
Expenses:
$33,665,200
$33,665,200
$33,665,200
45
Net Profit/(Loss)
($33,265,200)
($33,265,200)
($33,265,200)
46
47
48
49 Quarterly Recap
Revenue:
50
Expenses:
51
Net Profit/(Loss)
52
53
55
Satelite Operation
56
6
7
8
57 Annual Recap
Revenue:
$19,286,000,000
$24,000,000,000
$24,000,000,000
58
Expenses:
$9,693,155,000
$13,165,500,000
$13,165,500,000
59
Net Profit/(Loss)
$9,592,845,000
$10,834,500,000
$10,834,500,000
60
61
$383,005,000
$430,500,000
$430,500,000
IRR & NPV
63
Launch as
Comparison
64 Pre/Post
Note: These returns assume
that expenses
a percent of sales and/or as fixed expenses are as indicated below.
Revenue:
65
Expenses:
66
Net Profit/(Loss)
67
68
70
71 Internal Rate of Return
Total Invested:
72
73
74
75
76
77
2 of 20
L
M
N
O
Oct-05
10
20,000
0
20,000
200,000
Nov-05
11
20,000
0
20,000
220,000
Dec-05
12
20,000
0
20,000
240,000
CUMES
Months 1-12
240,000
0
240,000
240,000
$400,000
$0
$0
$0
$400,000
$400,000
$0
$0
$0
$400,000
$400,000
$0
$0
$0
$400,000
$4,800,000
$0
$0
$0
$4,800,000
$0
$0
$0
$1,500,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$32,500,000
$25,000,000
$99,500,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$3,337,500
$3,337,500
$26,700,000
$33,375,000
$40,050,000
$40,050,000
$320,400,000
$400,500,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$12,000
$12,000
$96,000
$26,000
$14,000
$100,000
$20,000
$280,000
$144,000
$144,000
$1,152,000
$312,000
$168,000
$1,200,000
$240,000
$3,360,000
$4,200
$6,000
$10,200
$4,200
$6,000
$10,200
$4,200
$6,000
$10,200
$50,400
$72,000
$122,400
10
$400,000
$33,665,200
($33,265,200)
11
$400,000
$33,665,200
($33,265,200)
9
$24,000,000,000
$13,165,500,000
$10,834,500,000
10
$24,000,000,000
$13,165,500,000
$10,834,500,000
$430,500,000
$430,500,000
12
$400,000
$33,665,200
($33,265,200)
$4,800,000
$2,003,482,400
($1,998,682,400)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
P
Q
A
SUBSCRIBERS
Months ===>
Jan-06
Feb-06
SUBSCRIBERS
13
14
SWANmail:
40,000
40,000
SWANsat:
0
0
New Subscribers:
40,000
40,000
280,000
320,000
INCOME
Direct Sales
SWANmail:
$800,000
$800,000
SWANsat:
$0
$0
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$800,000
$800,000
EXPENSES
$325,000,000
$0
Traunch Fee:
$40,000,000
$0
Host License:
$2,000,000
$0
LET License:
$45,500,000
$0
Fidelis:
$35,000,000
$0
Subtotal:
$122,500,000
$0
Marketing
$4,812,500
$4,812,500
$4,812,500
$4,812,500
$38,500,000
$38,500,000
Subtotal:
$48,125,000
$48,125,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
R
3 of 20
S
T
May-06
17
40,000
0
40,000
440,000
Jun-06
18
40,000
0
40,000
480,000
CUMES
Months 13-18
240,000
0
240,000
480,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$4,800,000
$0
$0
$0
$4,800,000
$0
$325,000,000
$0
$0
$650,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$45,500,000
$35,000,000
$122,500,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$28,875,000
$28,875,000
$231,000,000
$288,750,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$144,000
$144,000
$1,152,000
$312,000
$168,000
$1,200,000
$240,000
$3,360,000
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$50,400
$72,000
$122,400
15
$800,000
$48,705,400
($47,905,400)
16
$800,000
$373,705,400
($372,905,400)
1
2
Revenue:
$2,400,000
$2,400,000
Expenses:
$593,616,200
$471,116,200
Net Profit/(Loss)
($591,216,200)
($468,716,200)
3
$2,400,000
$471,116,200
($468,716,200)
4
$2,400,000
$471,116,200
($468,716,200)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$25,200
$25,200
V
Apr-06
16
40,000
0
40,000
400,000
$8,400
$8,400
$12,000
$12,000
$20,400
$20,400
SUMMARY INFORMATION
Profit/Loss
13
14
Revenue:
$800,000
$800,000
Expenses:
$496,205,400
$48,705,400
Net Profit/(Loss)
($495,405,400)
($47,905,400)
Quarterly Recap
U
Mar-06
15
40,000
0
40,000
360,000
$25,200
$25,200
17
$800,000
$48,705,400
($47,905,400)
18
$800,000
$48,705,400
($47,905,400)
$4,800,000
$1,064,732,400
($1,059,932,400)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
W
X
Jul-06
19
Y
4 of 20
Z
AA
AB
AC
40,000
0
40,000
520,000
Aug-06
20
40,000
0
40,000
560,000
Sep-06
21
40,000
0
40,000
600,000
Oct-06
22
40,000
0
40,000
640,000
Nov-06
23
40,000
0
40,000
680,000
Dec-06
24
40,000
0
40,000
720,000
CUMES
Months13-24
480,000
0
480,000
720,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$800,000
$0
$0
$0
$800,000
$9,600,000
$0
$0
$0
$9,600,000
$325,000,000
$0
$0
$325,000,000
$0
$0
$1,300,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$45,500,000
$35,000,000
$122,500,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$57,750,000
$57,750,000
$462,000,000
$577,500,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$24,000
$24,000
$192,000
$52,000
$28,000
$200,000
$40,000
$560,000
$288,000
$288,000
$2,304,000
$624,000
$336,000
$2,400,000
$480,000
$6,720,000
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$8,400
$12,000
$20,400
$100,800
$144,000
$244,800
19
$800,000
$373,705,400
($372,905,400)
20
$800,000
$48,705,400
($47,905,400)
21
$800,000
$48,705,400
($47,905,400)
22
$800,000
$373,705,400
($372,905,400)
23
$800,000
$48,705,400
($47,905,400)
24
$800,000
$48,705,400
($47,905,400)
$9,600,000
$2,006,964,800
($1,997,364,800)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
AD
AE
A
SUBSCRIBERS
Months ===>
Jan-07
Feb-07
SUBSCRIBERS
25
26
SWANmail:
60,000
60,000
SWANsat:
0
0
New Subscribers:
60,000
60,000
780,000
840,000
INCOME
Direct Sales
SWANmail:
$1,200,000
$1,200,000
SWANsat:
$0
$0
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$1,200,000
$1,200,000
EXPENSES
$325,000,000
$0
Traunch Fee:
$40,000,000
$0
Host License:
$2,000,000
$0
LET License:
$45,500,000
$0
Fidelis:
$35,000,000
$0
Subtotal:
$122,500,000
$0
Marketing
$4,812,500
$4,812,500
$4,812,500
$4,812,500
$38,500,000
$38,500,000
Subtotal:
$48,125,000
$48,125,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
AF
5 of 20
AG
AH
May-07
29
60,000
0
60,000
1,020,000
Jun-07
30
60,000
0
60,000
1,080,000
CUMES
Months 25-30
360,000
0
360,000
1,080,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$7,200,000
$0
$0
$0
$7,200,000
$0
$325,000,000
$0
$0
$650,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$45,500,000
$35,000,000
$122,500,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$28,875,000
$28,875,000
$231,000,000
$288,750,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$216,000
$216,000
$1,728,000
$468,000
$252,000
$1,800,000
$360,000
$5,040,000
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$75,600
$108,000
$183,600
27
$1,200,000
$48,995,600
($47,795,600)
28
$1,200,000
$373,995,600
($372,795,600)
1
2
Revenue:
$3,600,000
$3,600,000
Expenses:
$594,486,800
$471,986,800
Net Profit/(Loss)
($590,886,800)
($468,386,800)
3
$3,600,000
$471,986,800
($468,386,800)
4
$3,600,000
$471,986,800
($468,386,800)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$37,800
$37,800
AJ
Apr-07
28
60,000
0
60,000
960,000
$12,600
$12,600
$18,000
$18,000
$30,600
$30,600
SUMMARY INFORMATION
Profit/Loss
25
26
Revenue:
$1,200,000
$1,200,000
Expenses:
$496,495,600
$48,995,600
Net Profit/(Loss)
($495,295,600)
($47,795,600)
Quarterly Recap
AI
Mar-07
27
60,000
0
60,000
900,000
$37,800
$37,800
29
$1,200,000
$48,995,600
($47,795,600)
30
$1,200,000
$48,995,600
($47,795,600)
$7,200,000
$1,066,473,600
($1,059,273,600)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
AK
AL
Jul-07
31
AM
6 of 20
AN
AO
AP
AQ
60,000
0
60,000
1,140,000
Aug-07
32
60,000
0
60,000
1,200,000
Sep-07
33
60,000
0
60,000
1,260,000
Oct-07
34
60,000
0
60,000
1,320,000
Nov-07
35
60,000
0
60,000
1,380,000
Dec-07
36
60,000
0
60,000
1,440,000
CUMES
Months 25-36
720,000
0
720,000
1,440,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$1,200,000
$0
$0
$0
$1,200,000
$14,400,000
$0
$0
$0
$14,400,000
$325,000,000
$0
$0
$325,000,000
$0
$0
$1,300,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$45,500,000
$35,000,000
$122,500,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$4,812,500
$4,812,500
$38,500,000
$48,125,000
$57,750,000
$57,750,000
$462,000,000
$577,500,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$36,000
$36,000
$288,000
$78,000
$42,000
$300,000
$60,000
$840,000
$432,000
$432,000
$3,456,000
$936,000
$504,000
$3,600,000
$720,000
$10,080,000
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$12,600
$18,000
$30,600
$151,200
$216,000
$367,200
31
$1,200,000
$373,995,600
($372,795,600)
32
$1,200,000
$48,995,600
($47,795,600)
33
$1,200,000
$48,995,600
($47,795,600)
34
$1,200,000
$373,995,600
($372,795,600)
35
$1,200,000
$48,995,600
($47,795,600)
36
$1,200,000
$48,995,600
($47,795,600)
$14,400,000
$2,010,447,200
($1,996,047,200)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
AR
AS
A
SUBSCRIBERS
Months ===>
Jan-08
Feb-08
SUBSCRIBERS
37
38
SWANmail:
120,000
120,000
SWANsat:
0
0
New Subscribers:
120,000
120,000
1,560,000
1,680,000
INCOME
Direct Sales
SWANmail:
$2,400,000
$2,400,000
SWANsat:
$0
$0
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$2,400,000
$2,400,000
EXPENSES
$300,000,000
$0
Traunch Fee:
$40,000,000
$0
Host License:
$2,000,000
$0
LET License:
$52,000,000
$0
Fidelis:
$40,000,000
$0
Subtotal:
$134,000,000
$0
Marketing
$5,550,000
$5,550,000
$5,550,000
$5,550,000
$44,400,000
$44,400,000
Subtotal:
$55,500,000
$55,500,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
AT
7 of 20
AU
AV
May-08
41
120,000
0
120,000
2,040,000
Jun-08
42
120,000
0
120,000
2,160,000
CUMES
Months 37-42
720,000
0
720,000
2,160,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$14,400,000
$0
$0
$0
$14,400,000
$0
$300,000,000
$0
$0
$600,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$52,000,000
$40,000,000
$134,000,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$33,300,000
$33,300,000
$266,400,000
$333,000,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$432,000
$432,000
$3,456,000
$936,000
$504,000
$3,600,000
$720,000
$10,080,000
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$151,200
$216,000
$367,200
39
$2,400,000
$57,241,200
($54,841,200)
40
$2,400,000
$357,241,200
($354,841,200)
1
2
Revenue:
$7,200,000
$7,200,000
Expenses:
$605,723,600
$471,723,600
Net Profit/(Loss)
($598,523,600)
($464,523,600)
3
$7,200,000
$471,723,600
($464,523,600)
4
$7,200,000
$471,723,600
($464,523,600)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$75,600
$75,600
AX
Apr-08
40
120,000
0
120,000
1,920,000
$25,200
$25,200
$36,000
$36,000
$61,200
$61,200
SUMMARY INFORMATION
Profit/Loss
37
38
Revenue:
$2,400,000
$2,400,000
Expenses:
$491,241,200
$57,241,200
Net Profit/(Loss)
($488,841,200)
($54,841,200)
Quarterly Recap
AW
Mar-08
39
120,000
0
120,000
1,800,000
$75,600
$75,600
41
$2,400,000
$57,241,200
($54,841,200)
42
$2,400,000
$57,241,200
($54,841,200)
$14,400,000
$1,077,447,200
($1,063,047,200)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
AY
AZ
BA
8 of 20
BB
BC
BD
BE
Jul-08
43
120,000
0
120,000
2,280,000
Aug-08
44
120,000
0
120,000
2,400,000
Sep-08
45
120,000
0
120,000
2,520,000
Oct-08
46
120,000
0
120,000
2,640,000
Nov-08
47
120,000
0
120,000
2,760,000
Dec-08
48
120,000
0
120,000
2,880,000
CUMES
Months 37-48
1,440,000
0
1,440,000
2,880,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$2,400,000
$0
$0
$0
$2,400,000
$28,800,000
$0
$0
$0
$28,800,000
$300,000,000
$0
$0
$300,000,000
$0
$0
$1,200,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$52,000,000
$40,000,000
$134,000,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$5,550,000
$5,550,000
$44,400,000
$55,500,000
$66,600,000
$66,600,000
$532,800,000
$666,000,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$72,000
$72,000
$576,000
$156,000
$84,000
$600,000
$120,000
$1,680,000
$864,000
$864,000
$6,912,000
$1,872,000
$1,008,000
$7,200,000
$1,440,000
$20,160,000
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$25,200
$36,000
$61,200
$302,400
$432,000
$734,400
43
$2,400,000
$357,241,200
($354,841,200)
44
$2,400,000
$57,241,200
($54,841,200)
45
$2,400,000
$57,241,200
($54,841,200)
46
$2,400,000
$357,241,200
($354,841,200)
47
$2,400,000
$57,241,200
($54,841,200)
48
$2,400,000
$57,241,200
($54,841,200)
$28,800,000
$2,020,894,400
($1,992,094,400)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
BF
BG
A
SUBSCRIBERS
Months ===>
Jan-09
Feb-09
SUBSCRIBERS
49
50
SWANmail:
180,000
180,000
SWANsat:
0
0
New Subscribers:
180,000
180,000
3,060,000
3,240,000
INCOME
Direct Sales
SWANmail:
$3,600,000
$3,600,000
SWANsat:
$0
$0
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$3,600,000
$3,600,000
EXPENSES
$700,000,000
$0
Traunch Fee:
$40,000,000
$0
Host License:
$2,000,000
$0
LET License:
$84,500,000
$0
Fidelis:
$65,000,000
$0
Subtotal:
$191,500,000
$0
Marketing
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$73,900,000
$73,900,000
Subtotal:
$92,375,000
$92,375,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
BH
9 of 20
BI
BJ
May-09
53
180,000
0
180,000
3,780,000
Jun-09
54
180,000
0
180,000
3,960,000
CUMES
Months 49-54
1,080,000
0
1,080,000
3,960,000
$3,600,000
$0
$0
$0
$3,600,000
$3,600,000
$0
$0
$0
$3,600,000
$3,600,000
$0
$0
$0
$3,600,000
$3,600,000
$0
$0
$0
$3,600,000
$21,600,000
$0
$0
$0
$21,600,000
$0
$0
$0
$0
$700,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$84,500,000
$65,000,000
$191,500,000
$9,237,500
$9,237,500
$73,900,000
$92,375,000
$9,237,500
$9,237,500
$73,900,000
$92,375,000
$9,237,500
$9,237,500
$73,900,000
$92,375,000
$9,237,500
$9,237,500
$73,900,000
$92,375,000
$55,425,000
$55,425,000
$443,400,000
$554,250,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$648,000
$648,000
$5,184,000
$1,404,000
$756,000
$5,400,000
$1,080,000
$15,120,000
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$226,800
$324,000
$550,800
51
$3,600,000
$94,986,800
($91,386,800)
52
$3,600,000
$94,986,800
($91,386,800)
1
2
Revenue:
$10,800,000
$10,800,000
Expenses:
$1,176,460,400
$284,960,400
Net Profit/(Loss)
($1,165,660,400)
($274,160,400)
3
$10,800,000
$284,960,400
($274,160,400)
4
$10,800,000
$284,960,400
($274,160,400)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$113,400
$113,400
BL
Apr-09
52
180,000
0
180,000
3,600,000
$37,800
$37,800
$54,000
$54,000
$91,800
$91,800
SUMMARY INFORMATION
Profit/Loss
49
50
Revenue:
$3,600,000
$3,600,000
Expenses:
$986,486,800
$94,986,800
Net Profit/(Loss)
($982,886,800)
($91,386,800)
Quarterly Recap
BK
Mar-09
51
180,000
0
180,000
3,420,000
$113,400
$113,400
53
$3,600,000
$94,986,800
($91,386,800)
54
$3,600,000
$94,986,800
($91,386,800)
$21,600,000
$1,461,420,800
($1,439,820,800)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
10 of 20
BM
BN
BO
BP
BQ
A
SUBSCRIBERS
<== Launch |<==== ============== Stabilize ========>|
<==========System Test =========>|
Months ===>
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
SUBSCRIBERS
55
56
57
58
59
SWANmail:
180,000
180,000
180,000
180,000
180,000
SWANsat:
0
0
0
0
0
New Subscribers:
180,000
180,000
180,000
180,000
180,000
4,140,000
4,320,000
4,500,000
4,680,000
4,860,000
INCOME
Direct Sales
SWANmail:
$3,600,000
$3,600,000
$3,600,000
$3,600,000
$3,600,000
SWANsat:
$0
$0
$0
$0
$0
Activation Fees:
$0
$0
$0
$0
$0
Other Income
$0
$0
$0
$0
$0
Total:
$3,600,000
$3,600,000
$3,600,000
$3,600,000
$3,600,000
EXPENSES
$0
$0
$0
$0
$0
Traunch Fee:
$0
$0
$0
$0
$0
Host License:
$0
$0
$0
$0
$0
LET License:
$0
$0
$0
$0
$0
Fidelis:
$0
$0
$0
$0
$0
Subtotal:
$0
$0
$0
$0
$0
Marketing
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$9,237,500
$73,900,000
$73,900,000
$73,900,000
$73,900,000
$73,900,000
Subtotal:
$92,375,000
$92,375,000
$92,375,000
$92,375,000
$92,375,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
BR
==Start Service =>
Dec-09
60
180,000
0
180,000
5,040,000
CUMES
Months 49-60
2,160,000
0
2,160,000
5,040,000
BS
$3,600,000
$0
$0
$0
$3,600,000
$43,200,000
$0
$0
$0
$43,200,000
$0
$700,000,000
$0
$0
$0
$0
$0
$40,000,000
$2,000,000
$84,500,000
$65,000,000
$191,500,000
$9,237,500
$9,237,500
$73,900,000
$92,375,000
$110,850,000
$110,850,000
$886,800,000
$1,108,500,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$108,000
$108,000
$864,000
$234,000
$126,000
$900,000
$180,000
$2,520,000
$1,296,000
$1,296,000
$10,368,000
$2,808,000
$1,512,000
$10,800,000
$2,160,000
$30,240,000
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$37,800
$54,000
$91,800
$453,600
$648,000
$1,101,600
55
$3,600,000
$94,986,800
($91,386,800)
56
$3,600,000
$94,986,800
($91,386,800)
57
$3,600,000
$94,986,800
($91,386,800)
58
$3,600,000
$94,986,800
($91,386,800)
59
$3,600,000
$94,986,800
($91,386,800)
60
$3,600,000
$94,986,800
($91,386,800)
$43,200,000
$2,031,341,600
($1,988,141,600)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
BT
BU
A
SUBSCRIBERS
Year 1 of Satellite Operations
Months ===>
Jan-10
Feb-10
SUBSCRIBERS
61
62
SWANmail:
0
0
SWANsat:
1,500,000
1,500,000
New Subscribers:
1,500,000
1,500,000
6,540,000
8,040,000
INCOME
Direct Sales
SWANmail:
$0
$0
SWANsat:
$654,000,000
$804,000,000
Activation Fees:
$654,000,000
$150,000,000
Other Income
$0
$0
Total:
$1,308,000,000
$954,000,000
EXPENSES
$25,000,000
$25,000,000
Traunch Fee:
$0
$0
Host License:
$10,000,000
$10,000,000
LET License:
$0
$0
Fidelis:
$0
$0
Subtotal:
$10,000,000
$10,000,000
Marketing
$0
$0
$0
$0
$0
$0
Subtotal:
$0
$0
11 of 20
BV
BW
BX
BY
BZ
Mar-10
63
Apr-10
64
May-10
65
Jun-10
66
CUMES
Months 61-66
0
1,500,000
1,500,000
9,540,000
0
1,500,000
1,500,000
11,040,000
0
1,500,000
1,500,000
12,540,000
0
1,500,000
1,500,000
14,040,000
0
9,000,000
9,000,000
14,040,000
$0
$954,000,000
$150,000,000
$0
$1,104,000,000
$0
$1,104,000,000
$150,000,000
$0
$1,254,000,000
$0
$1,254,000,000
$150,000,000
$0
$1,404,000,000
$0
$1,404,000,000
$150,000,000
$0
$1,554,000,000
$0
$6,174,000,000
$1,404,000,000
$0
$7,578,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$150,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$60,000,000
$0
$0
$60,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$24,120,000
$24,120,000
$167,960,000
$52,260,000
$28,140,000
$40,200,000
$40,200,000
$377,000,000
$28,620,000
$28,620,000
$203,960,000
$62,010,000
$33,390,000
$47,700,000
$47,700,000
$452,000,000
$33,120,000
$33,120,000
$239,960,000
$71,760,000
$38,640,000
$55,200,000
$55,200,000
$527,000,000
$37,620,000
$37,620,000
$275,960,000
$81,510,000
$43,890,000
$62,700,000
$62,700,000
$602,000,000
$42,120,000
$42,120,000
$311,960,000
$91,260,000
$49,140,000
$70,200,000
$70,200,000
$677,000,000
$185,220,000
$185,220,000
$1,331,760,000
$401,310,000
$216,090,000
$308,700,000
$308,700,000
$2,937,000,000
$35,210,000
$20,195,000
$50,300,000
$28,850,000
$85,510,000
$49,045,000
SUMMARY INFORMATION
Profit/Loss
61
62
Revenue:
$1,308,000,000
$954,000,000
Expenses:
$422,510,000
$461,045,000
Net Profit/(Loss)
$885,490,000
$492,955,000
$22,820,000
$32,600,000
$55,420,000
$25,445,000
$36,350,000
$61,795,000
$28,070,000
$40,100,000
$68,170,000
$30,695,000
$43,850,000
$74,545,000
$162,435,000
$232,050,000
$394,485,000
63
$1,104,000,000
$542,420,000
$561,580,000
64
$1,254,000,000
$623,795,000
$630,205,000
65
$1,404,000,000
$705,170,000
$698,830,000
66
$1,554,000,000
$786,545,000
$767,455,000
$7,578,000,000
$3,541,485,000
$4,036,515,000
1
2
Revenue:
$3,366,000,000
$4,212,000,000
Expenses:
$1,425,975,000
$2,115,510,000
Net Profit/(Loss)
$1,940,025,000
$2,096,490,000
3
$5,562,000,000
$2,847,885,000
$2,714,115,000
4
$6,146,000,000
$3,303,785,000
$2,842,215,000
$107,835,000
$112,735,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
Quarterly Recap
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$19,620,000
$19,620,000
$131,960,000
$42,510,000
$22,890,000
$32,700,000
$32,700,000
$302,000,000
$78,225,000
$84,210,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
12 of 20
CA
CB
CC
CD
CE
CF
CG
Jul-10
67
Aug-10
68
Sep-10
69
Oct-10
70
Nov-10
71
Dec-10
72
CUMES
Months 61-72
0
1,500,000
1,500,000
15,540,000
0
1,500,000
1,500,000
17,040,000
0
1,500,000
1,500,000
18,540,000
0
1,460,000
1,460,000
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
14,960,000
14,960,000
20,000,000
$0
$1,554,000,000
$150,000,000
$0
$1,704,000,000
$0
$1,704,000,000
$150,000,000
$0
$1,854,000,000
$0
$1,854,000,000
$150,000,000
$0
$2,004,000,000
$0
$2,000,000,000
$146,000,000
$0
$2,146,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$17,286,000,000
$2,000,000,000
$0
$19,286,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$300,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$120,000,000
$0
$0
$120,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$46,620,000
$46,620,000
$347,960,000
$101,010,000
$54,390,000
$77,700,000
$77,700,000
$752,000,000
$51,120,000
$51,120,000
$383,960,000
$110,760,000
$59,640,000
$85,200,000
$85,200,000
$827,000,000
$55,620,000
$55,620,000
$419,960,000
$120,510,000
$64,890,000
$92,700,000
$92,700,000
$902,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$518,580,000
$518,580,000
$3,848,640,000
$1,123,590,000
$605,010,000
$864,300,000
$864,300,000
$8,343,000,000
$33,320,000
$47,600,000
$80,920,000
$35,945,000
$51,350,000
$87,295,000
$38,570,000
$55,100,000
$93,670,000
$40,985,000
$58,550,000
$99,535,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$383,005,000
$547,150,000
$930,155,000
67
$1,704,000,000
$867,920,000
$836,080,000
68
$1,854,000,000
$949,295,000
$904,705,000
69
$2,004,000,000
$1,030,670,000
$973,330,000
70
$2,146,000,000
$1,109,535,000
$1,036,465,000
71
$2,000,000,000
$1,097,125,000
$902,875,000
72
$2,000,000,000
$1,097,125,000
$902,875,000
$19,286,000,000
$9,693,155,000
$9,592,845,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
CH
CI
A
SUBSCRIBERS
Months ===>
Jan-11
Feb-11
SUBSCRIBERS
73
74
SWANmail:
0
0
SWANsat:
0
0
New Subscribers:
0
0
20,000,000
20,000,000
INCOME
Direct Sales
SWANmail:
$0
$0
SWANsat:
$2,000,000,000
$2,000,000,000
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$2,000,000,000
$2,000,000,000
EXPENSES
$25,000,000
$25,000,000
Traunch Fee:
$0
$0
Host License:
$10,000,000
$10,000,000
LET License:
$0
$0
Fidelis:
$0
$0
Subtotal:
$10,000,000
$10,000,000
Marketing
$0
$0
$0
$0
$0
$0
Subtotal:
$0
$0
13 of 20
CJ
CK
CL
CM
CN
Mar-11
75
Apr-11
76
May-11
77
Jun-11
78
CUMES
Months 73-78
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$12,000,000,000
$0
$0
$12,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$150,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$60,000,000
$0
$0
$60,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$360,000,000
$360,000,000
$2,730,000,000
$780,000,000
$420,000,000
$600,000,000
$600,000,000
$5,850,000,000
$35,875,000
$35,875,000
$51,250,000
$51,250,000
$87,125,000
$87,125,000
SUMMARY INFORMATION
Profit/Loss
73
74
Revenue:
$2,000,000,000
$2,000,000,000
Expenses:
$1,097,125,000
$1,097,125,000
Net Profit/(Loss)
$902,875,000
$902,875,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$215,250,000
$307,500,000
$522,750,000
75
$2,000,000,000
$1,097,125,000
$902,875,000
76
$2,000,000,000
$1,097,125,000
$902,875,000
77
$2,000,000,000
$1,097,125,000
$902,875,000
78
$2,000,000,000
$1,097,125,000
$902,875,000
$12,000,000,000
$6,582,750,000
$5,417,250,000
1
2
Revenue:
$6,000,000,000
$6,000,000,000
Expenses:
$3,291,375,000
$3,291,375,000
Net Profit/(Loss)
$2,708,625,000
$2,708,625,000
3
$6,000,000,000
$3,291,375,000
$2,708,625,000
4
$6,000,000,000
$3,291,375,000
$2,708,625,000
$107,625,000
$107,625,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
Quarterly Recap
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$107,625,000
$107,625,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
14 of 20
CO
CP
CQ
CR
CS
CT
CU
Jul-11
79
Aug-11
80
Sep-11
81
Oct-11
82
Nov-11
83
Dec-11
84
CUMES
Months 73-84
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$24,000,000,000
$0
$0
$24,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$300,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$120,000,000
$0
$0
$120,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$720,000,000
$720,000,000
$5,460,000,000
$1,560,000,000
$840,000,000
$1,200,000,000
$1,200,000,000
$11,700,000,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$430,500,000
$615,000,000
$1,045,500,000
79
$2,000,000,000
$1,097,125,000
$902,875,000
80
$2,000,000,000
$1,097,125,000
$902,875,000
81
$2,000,000,000
$1,097,125,000
$902,875,000
82
$2,000,000,000
$1,097,125,000
$902,875,000
83
$2,000,000,000
$1,097,125,000
$902,875,000
84
$2,000,000,000
$1,097,125,000
$902,875,000
$24,000,000,000
$13,165,500,000
$10,834,500,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
CV
CW
A
SUBSCRIBERS
Months ===>
Jan-12
Feb-12
SUBSCRIBERS
85
86
SWANmail:
0
0
SWANsat:
0
0
New Subscribers:
0
0
20,000,000
20,000,000
INCOME
Direct Sales
SWANmail:
$0
$0
SWANsat:
$2,000,000,000
$2,000,000,000
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$2,000,000,000
$2,000,000,000
EXPENSES
$25,000,000
$25,000,000
Traunch Fee:
$0
$0
Host License:
$10,000,000
$10,000,000
LET License:
$0
$0
Fidelis:
$0
$0
Subtotal:
$10,000,000
$10,000,000
Marketing
$0
$0
$0
$0
$0
$0
Subtotal:
$0
$0
15 of 20
CX
CY
CZ
DA
DB
Mar-12
87
Apr-12
88
May-12
89
Jun-12
90
CUMES
Months 85-90
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$12,000,000,000
$0
$0
$12,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$150,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$60,000,000
$0
$0
$60,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$360,000,000
$360,000,000
$2,730,000,000
$780,000,000
$420,000,000
$600,000,000
$600,000,000
$5,850,000,000
$35,875,000
$35,875,000
$51,250,000
$51,250,000
$87,125,000
$87,125,000
SUMMARY INFORMATION
Profit/Loss
85
86
Revenue:
$2,000,000,000
$2,000,000,000
Expenses:
$1,097,125,000
$1,097,125,000
Net Profit/(Loss)
$902,875,000
$902,875,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$215,250,000
$307,500,000
$522,750,000
87
$2,000,000,000
$1,097,125,000
$902,875,000
88
$2,000,000,000
$1,097,125,000
$902,875,000
89
$2,000,000,000
$1,097,125,000
$902,875,000
90
$2,000,000,000
$1,097,125,000
$902,875,000
$12,000,000,000
$6,582,750,000
$5,417,250,000
1
2
Revenue:
$6,000,000,000
$6,000,000,000
Expenses:
$3,291,375,000
$3,291,375,000
Net Profit/(Loss)
$2,708,625,000
$2,708,625,000
3
$6,000,000,000
$3,291,375,000
$2,708,625,000
4
$6,000,000,000
$3,291,375,000
$2,708,625,000
$107,625,000
$107,625,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
Quarterly Recap
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$107,625,000
$107,625,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
16 of 20
DC
DD
DE
DF
DG
DH
DI
Jul-12
91
Aug-12
92
Sep-12
93
Oct-12
94
Nov-12
95
Dec-12
96
CUMES
Months 85-96
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$24,000,000,000
$0
$0
$24,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$300,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$120,000,000
$0
$0
$120,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$720,000,000
$720,000,000
$5,460,000,000
$1,560,000,000
$840,000,000
$1,200,000,000
$1,200,000,000
$11,700,000,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$430,500,000
$615,000,000
$1,045,500,000
91
$2,000,000,000
$1,097,125,000
$902,875,000
92
$2,000,000,000
$1,097,125,000
$902,875,000
93
$2,000,000,000
$1,097,125,000
$902,875,000
94
$2,000,000,000
$1,097,125,000
$902,875,000
95
$2,000,000,000
$1,097,125,000
$902,875,000
96
$2,000,000,000
$1,097,125,000
$902,875,000
$24,000,000,000
$13,165,500,000
$10,834,500,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
DJ
DK
A
SUBSCRIBERS
Months ===>
Jan-13
Feb-13
SUBSCRIBERS
97
98
SWANmail:
0
0
SWANsat:
0
0
New Subscribers:
0
0
20,000,000
20,000,000
INCOME
Direct Sales
SWANmail:
$0
$0
SWANsat:
$2,000,000,000
$2,000,000,000
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$2,000,000,000
$2,000,000,000
EXPENSES
$25,000,000
$25,000,000
Traunch Fee:
$0
$0
Host License:
$10,000,000
$10,000,000
LET License:
$0
$0
Fidelis:
$0
$0
Subtotal:
$10,000,000
$10,000,000
Marketing
$0
$0
$0
$0
$0
$0
Subtotal:
$0
$0
17 of 20
DL
DM
DN
DO
DP
Mar-13
99
Apr-13
100
May-13
101
Jun-13
102
CUMES
Months 97-102
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$12,000,000,000
$0
$0
$12,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$150,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$60,000,000
$0
$0
$60,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$360,000,000
$360,000,000
$2,730,000,000
$780,000,000
$420,000,000
$600,000,000
$600,000,000
$5,850,000,000
$35,875,000
$35,875,000
$51,250,000
$51,250,000
$87,125,000
$87,125,000
SUMMARY INFORMATION
Profit/Loss
97
98
Revenue:
$2,000,000,000
$2,000,000,000
Expenses:
$1,097,125,000
$1,097,125,000
Net Profit/(Loss)
$902,875,000
$902,875,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$215,250,000
$307,500,000
$522,750,000
99
$2,000,000,000
$1,097,125,000
$902,875,000
100
$2,000,000,000
$1,097,125,000
$902,875,000
101
$2,000,000,000
$1,097,125,000
$902,875,000
102
$2,000,000,000
$1,097,125,000
$902,875,000
$12,000,000,000
$6,582,750,000
$5,417,250,000
1
2
Revenue:
$6,000,000,000
$6,000,000,000
Expenses:
$3,291,375,000
$3,291,375,000
Net Profit/(Loss)
$2,708,625,000
$2,708,625,000
3
$6,000,000,000
$3,291,375,000
$2,708,625,000
4
$6,000,000,000
$3,291,375,000
$2,708,625,000
$107,625,000
$107,625,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
Quarterly Recap
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$107,625,000
$107,625,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
18 of 20
DQ
DR
DS
DT
DU
DV
DW
Jul-13
103
Aug-13
104
Sep-13
105
Oct-13
106
Nov-13
107
Dec-13
108
CUMES
Months 103-108
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$24,000,000,000
$0
$0
$24,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$300,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$120,000,000
$0
$0
$120,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$720,000,000
$720,000,000
$5,460,000,000
$1,560,000,000
$840,000,000
$1,200,000,000
$1,200,000,000
$11,700,000,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$430,500,000
$615,000,000
$1,045,500,000
103
$2,000,000,000
$1,097,125,000
$902,875,000
104
$2,000,000,000
$1,097,125,000
$902,875,000
105
$2,000,000,000
$1,097,125,000
$902,875,000
106
$2,000,000,000
$1,097,125,000
$902,875,000
107
$2,000,000,000
$1,097,125,000
$902,875,000
108
$2,000,000,000
$1,097,125,000
$902,875,000
$24,000,000,000
$13,165,500,000
$10,834,500,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
7/14/2004 at 6:00 PM
DX
DY
A
SUBSCRIBERS
Year 5 of Salellite Operations
Months ===>
Jan-14
Feb-14
SUBSCRIBERS
109
110
SWANmail:
0
0
SWANsat:
0
0
New Subscribers:
0
0
20,000,000
20,000,000
INCOME
Direct Sales
SWANmail:
$0
$0
SWANsat:
$2,000,000,000
$2,000,000,000
Activation Fees:
$0
$0
Other Income
$0
$0
Total:
$2,000,000,000
$2,000,000,000
EXPENSES
$25,000,000
$25,000,000
Traunch Fee:
$0
$0
Host License:
$10,000,000
$10,000,000
LET License:
$0
$0
Fidelis:
$0
$0
Subtotal:
$10,000,000
$10,000,000
Marketing
$0
$0
$0
$0
$0
$0
Subtotal:
$0
$0
19 of 20
DZ
EA
EB
EC
ED
Mar-14
111
Apr-14
112
May-14
113
Jun-14
114
CUMES
Months 109-113
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$12,000,000,000
$0
$0
$12,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$150,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$60,000,000
$0
$0
$60,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$360,000,000
$360,000,000
$2,730,000,000
$780,000,000
$420,000,000
$600,000,000
$600,000,000
$5,850,000,000
$35,875,000
$35,875,000
$51,250,000
$51,250,000
$87,125,000
$87,125,000
SUMMARY INFORMATION
Profit/Loss
109
110
Revenue:
$2,000,000,000
$2,000,000,000
Expenses:
$1,097,125,000
$1,097,125,000
Net Profit/(Loss)
$902,875,000
$902,875,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$215,250,000
$307,500,000
$522,750,000
111
$2,000,000,000
$1,097,125,000
$902,875,000
112
$2,000,000,000
$1,097,125,000
$902,875,000
113
$2,000,000,000
$1,097,125,000
$902,875,000
114
$2,000,000,000
$1,097,125,000
$902,875,000
$12,000,000,000
$6,582,750,000
$5,417,250,000
1
2
Revenue:
$6,000,000,000
$6,000,000,000
Expenses:
$3,291,375,000
$3,291,375,000
Net Profit/(Loss)
$2,708,625,000
$2,708,625,000
3
$6,000,000,000
$3,291,375,000
$2,708,625,000
4
$6,000,000,000
$3,291,375,000
$2,708,625,000
$107,625,000
$107,625,000
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
Quarterly Recap
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$107,625,000
$107,625,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
A
SUBSCRIBERS
Months ===>
SUBSCRIBERS
SWANmail:
SWANsat:
New Subscribers:
INCOME
Direct Sales
SWANmail:
SWANsat:
Activation Fees:
Other Income
Total:
EXPENSES
Traunch Fee:
Host License:
LET License:
Fidelis:
Subtotal:
Marketing
Subtotal:
LET License:
Fidelis Fee:
Subtotal:
Other Expenses
Other Expenses
SUMMARY INFORMATION
Profit/Loss
Revenue:
Expenses:
Net Profit/(Loss)
Quarterly Recap
Revenue:
Expenses:
Net Profit/(Loss)
Annual Recap
Revenue:
Expenses:
Net Profit/(Loss)
IRR & NPV
Revenue:
Expenses:
Net Profit/(Loss)
Total Invested:
7/14/2004 at 6:00 PM
20 of 20
EE
EF
EG
EH
EI
EJ
EK
Jul-14
115
Aug-14
116
Sep-14
117
Oct-14
118
Nov-14
119
Dec-14
120
CUMES
Months 115-120
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
0
0
0
20,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$2,000,000,000
$0
$0
$2,000,000,000
$0
$24,000,000,000
$0
$0
$24,000,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$25,000,000
$300,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$10,000,000
$0
$0
$10,000,000
$0
$120,000,000
$0
$0
$120,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$60,000,000
$60,000,000
$455,000,000
$130,000,000
$70,000,000
$100,000,000
$100,000,000
$975,000,000
$720,000,000
$720,000,000
$5,460,000,000
$1,560,000,000
$840,000,000
$1,200,000,000
$1,200,000,000
$11,700,000,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$35,875,000
$51,250,000
$87,125,000
$430,500,000
$615,000,000
$1,045,500,000
115
$2,000,000,000
$1,097,125,000
$902,875,000
116
$2,000,000,000
$1,097,125,000
$902,875,000
117
$2,000,000,000
$1,097,125,000
$902,875,000
118
$2,000,000,000
$1,097,125,000
$902,875,000
119
$2,000,000,000
$1,097,125,000
$902,875,000
120
$2,000,000,000
$1,097,125,000
$902,875,000
$24,000,000,000
$13,165,500,000
$10,834,500,000
DRAFT
APPENDIX TWO:
PRIVATE PLACEMENT MEMORANDUM
DATED: MAY 15, 2004
SWANSAT TERRITORY 1, LTD.
(A California Limited Partnership)
SAT TERRITORY LICENSED TO THE PARTNERSHIP:
North America, including the United States, Canada,
Bermuda and Greenland
Price of Each Unit: $10,000
Minimum Offering: $2,000,000
Maximum Offering: $1,000,000,000
Total Units Offered: 100,000 Units
Minimum Investment: Two (2) Units ($20,000)
SWANsat Territory 1, Ltd. (the “Partnership”) is a limited partnership formed to market the SWANsat services as described
herein in the sales territory as set forth below, which encompasses North America, including the United States, Canada,
Bermuda and Greenland. Subject to the conditions set forth elsewhere herein, the Partnership will be obligated to pay a
Subscriber Account Territory (SAT) license fee of up to $2,000,000 and may be obligated to provide and/or secure additional
capital or other financing for the Partnership’s pro rata share of expenses in the design, construction, launch, and operation of
the SWANsat System, as further described herein and in the General Partner’s Marketing Plan and Information
Memorandum, up to a maximum of $1,000,000,000. The principal investment objectives are to preserve and protect the
Limited Partners’ capital and to realize capital appreciation upon the sale and/or lease of the Subscriber Accounts licensed by
the Partnership.
THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE “ACT”). IN PARTICULAR, WHEN USED
IN THIS DOCUMENT, THE WORDS “PLANS,” “CONFIDENT THAT,” “BELIEVES,” “EXPECTS,” “INTENDS
TO,” “WILL,” AND SIMILAR CONDITIONAL EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARDLOOKING STATEMENTS WITHIN THE MEANING OF THE ACT AND ARE SUBJECT TO THE SAFE
HARBOR CREATED BY THE ACT. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED IN
ANY FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT
LIMITED TO, MARKET CONDITIONS, COMPETITIVE FACTORS, THE ABILITY TO SUCCESSFULLY
COMPLETE ADDITIONAL FINANCING, AND OTHER RISKS.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE RISK. ONLY THOSE PERSONS WHO CAN BEAR
THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT SHOULD INVEST. SEE “RISK FACTORS,” PAGE 22.
THE LIMITED PARTNERSHIP INTERESTS (“INTERESTS”) ARE BEING OFFERED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN RELIANCE UPON
THE EXEMPTIONS FROM REGISTRATION AFFORDED BY SECTION 4(2) AND/OR 3(B) OF THE ACT AND
REGULATION D (REGULATION D”) PROMULGATED THEREUNDER. THIS CONFIDENTIAL PRIVATE
OFFERING MEMORANDUM (THE “MEMORANDUM”) HAS NOT BEEN REVIEWED, APPROVED OR
DISAPPROVED, NOR HAS THE ACCURACY OR ADEQUACY OF THE INFORMATION SET FORTH HEREIN
BEEN PASSED UPON BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
ADMINISTRATOR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Offered by:
SWANsat 1, Inc.
215 E. Orangethorpe Avenue, #300
Fullerton, CA 92832-3017 USA
tel: 1-714-738-1938 • fax: 1-831-417-5270
e-mail: [email protected]
DRAFT ONLY DRAFT ONLY DRAFT ONLY DRAFT ONLY DRAFT ONLY DRAFT ONLY DRAFT
CONFIDENTIAL PRIVATE OFFERING MEMORANDUM
Page 2
Confidential Private Placement Memorandum — SWANsat Territory 1, Ltd.
Partnership
Units
Per Unit
Price to
Public
Proceeds to
Partnership
1
Fee
$10,000
$500
$9,500
Total Minimum
$2,000,000
$200,000
$1,800,000
Total Maximum2
$1,000,000,000
$50,000,000
$950,000,000
1
The Partnership expects to pay a Finder's Fee which will not exceed 5% of the price of the Units sold above $2,000,000
and 10% of the price of the Units sold below $2,000,000. Said Finder's Fee will be held and dispersed by the General
Partner at its sole discretion. The Finder’s Fee shall be allocated to the Finder(s) in the form of 1% of the cash raised and a
4% equity interest in the Units offered for amounts greater than $2,000,000 and 9% of the cash raised and a 1% equity
interest in the Units offered for amounts less than $2,000,000.
2
$2,000,000 in Limited Partnership interests are being offered in Offering Round 1. Upon subscription of Offering Round
1, an additional Offering Round 2 of up to a total of $1,000,000,000 in Limited Partnership interests may also be sold by
the General Partner. Funds being received will be deposited in a dedicated bank account until the Offering Round 1 being
made hereby is consummated. The Offering Round 1 will not be consummated, and all contributions will be returned,
along with any interest earned, unless a minimum of $2,000,000 has been received and accepted within 365 days from the
date of this Memorandum (the “Termination Date”). Preferred Capital Contributions may be accessed by the General
Partner prior to collection of the minimum offering. The General Partner reserves the right to pay all or a portion of the
Finder’s Fee to the General Partner, its officers, agents, or employees as compensation for creative services, management
fees and expenses, or as sales commissions.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. PROSPECTIVE
INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS LEGAL OR TAX ADVICE.
EACH INVESTOR SHOULD CONSULT HIS OWN LEGAL COUNSEL AND ACCOUNTANT AS TO LEGAL, TAX,
AND RELATED MATTERS CONCERNING HIS INVESTMENT.
REFERENCE SHOULD BE MADE TO THE FORM OF LIMITED PARTNERSHIP AGREEMENT ATTACHED
HERETO (THE “PARTNERSHIP AGREEMENT”) FOR COMPLETE INFORMATION CONCERNING THE RIGHTS
AND OBLIGATIONS OF THE PARTIES THERETO. CERTAIN PROVISIONS OF THE PARTNERSHIP AGREEMENT
AND OTHER AGREEMENTS ARE SUMMARIZED HEREIN, BUT IT SHOULD NOT BE ASSUMED THAT THE
SUMMARIES ARE COMPLETE. ACCORDINGLY, REFERENCE SHOULD BE MADE TO THE DOCUMENTS
THEMSELVES FOR A MORE THOROUGH UNDERSTANDING OF THIS TRANSACTION. OTHER INFORMATION
CONTAINED HEREIN HAS BEEN OBTAINED FROM THE GENERAL PARTNER AND FROM OTHER SOURCES
DEEMED RELIABLE. SUCH INFORMATION NECESSARILY INCORPORATES SIGNIFICANT ASSUMPTIONS AS
WELL AS FACTUAL MATTERS. ALL PARTNERSHIP DOCUMENTS RELATING TO THIS INVESTMENT AND
RELATED DOCUMENTS AND AGREEMENTS WILL BE MADE AVAILABLE TO THE PERSON TO WHOM THIS
MEMORANDUM IS ISSUED UPON REQUEST TO THE GENERAL PARTNER.
ANY INVESTOR MUST CONTINUE TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN
INDEFINITE PERIOD. THE INTERESTS MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY AN
INVESTOR ONLY IF SUCH INTERESTS ARE REGISTERED, OR, IN THE OPINION OF COUNSEL FOR THE
PARTNERSHIP, REGISTRATION IS NOT REQUIRED UNDER APPLICABLE SECURITIES LAWS.
FURTHERMORE, NO MARKET FOR THE INTERESTS CAN BE EXPECTED TO DEVELOP, AND TRANSFER
OF THE INTERESTS WILL BE SUBJECT TO APPROVAL BY THE GENERAL PARTNER.
THERE IS NO TRADING MARKET FOR THE INTERESTS, AND IT IS NOT LIKELY THAT SUCH A MARKET
WILL DEVELOP IN THE FUTURE. THE SALE, TRANSFER, OR OTHER DISPOSITION OF THE INTERESTS
IS SUBSTANTIALLY RESTRICTED BY APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
EACH PROSPECTIVE LIMITED PARTNER IS HEREBY ENCOURAGED TO AVAIL HIMSELF OF THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE GENERAL PARTNER
CONCERNING THE TERMS AND CONDITIONS OF THIS OFFERING AND TO OBTAIN ADDITIONAL
Page 3
THE INFORMATION CONTAINED IN THIS MEMORANDUM IS FURNISHED ON A CONFIDENTIAL BASIS
FOR USE BY THE PROSPECTIVE INVESTOR. BY ACCEPTANCE OF THIS MEMORANDUM, EACH
PROSPECTIVE INVESTOR AGREES THAT HE WILL NOT TRANSMIT, REPRODUCE, OR MAKE
AVAILABLE TO ANY OTHER PERSON THIS MEMORANDUM. THE PROSPECTIVE INVESTOR, BY
ACCEPTING DELIVERY OF THIS MEMORANDUM, AGREES TO RETURN IT AND ALL ENCLOSED
DOCUMENTS TO THE GENERAL PARTNER IF THE PROSPECTIVE INVESTOR DOES NOT AGREE TO
PURCHASE ONE OR MORE-OF THE INTERESTS OFFERED HEREBY.
THIS OFFERING IS SUBJECT TO WITHDRAWAL, CANCELLATION, OR MODIFICATION BY THE GENERAL
PARTNER WITHOUT NOTICE. THE GENERAL PARTNER RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO
REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART FOR ANY REASON OR TO ALLOT TO ANY SUBSCRIBER
LESS THAN THE NUMBER OF INTERESTS SUBSCRIBED FOR.
THE OFFERING PRICE OF THE INTERESTS HAS BEEN DETERMINED BY THE GENERAL PARTNER AND DOES
NOT NECESSARILY BEAR ANY RELATIONSHIP TO THE ASSETS, BOOK VALUE, OR POTENTIAL EARNINGS
OF THE PARTNERSHIP OR ANY OTHER RECOGNIZED CRITERIA OF VALUE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS MEMORANDUM IN CONNECTION WITH THE OFFER BEING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE PARTNERSHIP.
THIS OFFERING IS MADE AND SALES OF INTERESTS WILL BE MADE ONLY TO PURCHASERS WHO QUALIFY
AS “ACCREDITED INVESTORS” AND TO CERTAIN NON-ACCREDITED INVESTORS WHO SATISFY THE
SUITABILITY STANDARDS SET FORTH IN THIS MEMORANDUM UNDER REGULATION D.
THE STATEMENTS CONTAINED HEREIN ARE BASED ON INFORMATION BELIEVED BY THE PARTNERSHIP
TO BE RELIABLE. NO WARRANTY CAN BE MADE AS TO THE ACCURACY OF SUCH INFORMATION OR THAT
CIRCUMSTANCES HAVE NOT CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. THIS
MEMORANDUM CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO THE
PROPOSED BUSINESS OF THE PARTNERSHIP AND THE PURCHASE OF INTERESTS, AS WELL AS SUMMARIES
OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH SUMMARIES DO NOT
PURPORT TO BE COMPLETE, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF
THE ORIGINAL DOCUMENTS, STATUTES, AND REGULATIONS.
IF YOU HAVE ANY QUESTIONS OR DESIRE ANY ADDITIONAL INFORMATION, PLEASE WRITE OR CALL:
SWANSAT TERRITORY 1, LTD., 215 E. ORANGETHORPE AVENUE, #300, FULLERTON, CA 92832-3017, TEL: 714738-1938, FAX: 831-417-5270, E-MAIL: [email protected].
THESE INTERESTS ARE BEING OFFERED SUBJECT TO THE CONDITIONS SET FORTH HEREIN.
JURISDICTIONAL NOTICES
FOR RESIDENTS OF ALL STATES: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE INTERESTS ARE SUBJECT IN VARIOUS STATES TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY,
NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL
FOR ALABAMA RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION
UNDER THE ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
INFORMATION, TO THE EXTENT POSSESSED OR OBTAINABLE BY THE GENERAL PARTNER WITHOUT
UNREASONABLE EFFORT OR EXPENSE, RELEVANT TO THIS OFFERING.
Page 4
HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES NOT
RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES IT PASS UPON THE
ACCURACY OR COMPLETENESS OF THIS PRIVATE PLACEMENT MEMORANDUM. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE. THE PURCHASE PRICE OF THE INTEREST ACQUIRED BY A
NON-ACCREDITED INVESTOR RESIDING IN THE STATE OF ALABAMA MAY NOT EXCEED 20% OF THE
PURCHASER’S NET WORTH.
FOR ALASKA RESIDENTS: THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE
ADMINISTRATOR OF SECURITIES OF THE STATE OF ALASKA UNDER PROVISIONS OF 3 AAC 08.500-3 AAC
08.506. THE INVESTOR IS ADVISED THAT THE ADMINISTRATOR HAS MADE ONLY A CURSORY REVIEW OF
THE REGISTRATION STATEMENT AND HAS NOT REVIEWED THIS DOCUMENT SINCE THE DOCUMENT IS
NOT REQUIRED TO BE FILED WITH THE ADMINISTRATOR. THE FACT OF REGISTRATION DOES NOT MEAN
THAT THE ADMINISTRATOR HAS PASSED IN ANY WAY UPON THE MERITS, RECOMMENDED, OR
APPROVED THE SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A VIOLATION OF AS.45.55.170.
THE INVESTOR MUST RELY ON THE INVESTOR'S OWN EXAMINATION OF THE PERSON OR ENTITY
CREATING THE SECURITIES AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS
INVOLVED, IN MAKING AN INVESTMENT DECISION ON THESE SECURITIES.
FOR ARIZONA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF ARIZONA AND, THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER SUCH
ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR ARKANSAS RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION
UNDER SECTION 14(b)(14) OF THE ARKANSAS SECURITIES ACT AND SECTION 4(2) OF THE SECURITIES ACT
OF 1933. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS NOT BEEN FILED WITH THE
ARKANSAS SECURITIES DEPARTMENT OR WITH THE SECURITIES AND EXCHANGE COMMISSION. NEITHER
THE DEPARTMENT NOR THE COMMISSION HAS PASSED UPON THE VALUE OF THESE SECURITIES, MADE
ANY RECOMMENDATIONS AS TO THEIR PURCHASE, APPROVED OR DISAPPROVED THE OFFERING, OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL. THE PURCHASE PRICE OF THE INTEREST ACQUIRED BY AN UNACCREDITED
INVESTOR RESIDING IN THE STATE OF ARKANSAS MAY NOT EXCEED 20% OF THE PURCHASER'S NET
WORTH.
FOR CALIFORNIA RESIDENTS: THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF THE SHARES. IT IS UNLAWFUL TO
CONSUMMATE A SALE OR TRANSFER OF THE SHARES OR ANY INTEREST THEREIN OR TO RECEIVE ANY
CONSIDERATION THEREFORE WITHOUT THE PRIOR CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES. THE SALE OF
THE SHARES HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF
THE CONSIDERATION PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF THE SHARES
IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATION CODE. AS OF THE DATE OF THIS OFFERING MEMORANDUM, THE PARTNERSHIP MAY DO
BUSINESS WITH PERSONS OR GROUPS LOCATED IN SOUTH AFRICA. INVESTORS MAY CONTACT THE
SECRETARY OF STATE OF CALIFORNIA, c/o SOUTH AFRICA BUSINESS NOTICE, OFFICE OF THE SECRETARY
OF STATE, 1230 J STREET, ROOM 100, SACRAMENTO, CA 95814, FOR FURTHER INFORMATION.
FOR COLORADO RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE COLORADO SECURITIES ACT OF 1981, AS AMENDED. BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THIS OFFERING, THESE SECURITIES CANNOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS
SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT AND THE COLORADO SECURITIES ACT OF
I981, AS AMENDED, IF SUCH REGISTRATION IS REQUIRED.
FOR CONNECTICUT RESIDENTS: THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
BANKING COMMISSIONER OF THE STATE OF CONNECTICUT, NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS OFFERING OR THIS MEMORANDUM. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
FOR DELAWARE RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE DELAWARE
SECURITIES ACT AND ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION 7309(b)(9)
Page 5
FOR DISTRICT OF COLUMBIA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE DISTRICT OF COLUMBIA SECURITIES ACT SINCE SUCH ACT DOES NOT REQUIRE REGISTRATION OF
SECURITIES ISSUES. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF
TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR FLORIDA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT BY REASON
OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR
ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE LAWS OF THIS STATE, IF SUCH REGISTRATION IS REQUIRED. THE FLORIDA SECURITIES AND
INVESTOR PROTECTION ACT PROVIDES, WHERE SALES ARE MADE TO FIVE OR MORE PERSONS IN
FLORIDA, THAT ANY SALE MADE PURSUANT TO SUBSECTION 517.061 (11) OF THE FLORIDA SECURITIES
AND INVESTOR PROTECTION ACT SHALL BE VOIDABLE BY SUCH FLORIDA PURCHASE EITHER WITHIN
THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
ISSUER, AND AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASE, WHICHEVER OCCURS
LATER. WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH
THIS WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT
THE ADDRESS SET FORTH IN THIS MEMORANDUM INDICATING HIS OR HER INTENTION TO WITHDRAW.
SUCH LETTER OR TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF THE
AFOREMENTIONED THIRD BUSINESS DAY. IT IS ADVISABLE TO SEND SUCH LETTER BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME IT
WAS MAILED. IF THE REQUEST IS MADE ORALLY, IN PERSON OR BY TELEPHONE TO AN OFFICER OF THE
COMPANY, A WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN MADE SHOULD BE REQUESTED.
FOR GEORGIA RESIDENTS: THESE SECURITIES ARE BEING OFFERED PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE GEORGIA SECURITIES ACT OF 1973 AND WILL BE ISSUED OR SOLD IN
RELIANCE ON PARAGRAPH (13) OF CODE 10-5-9 THEREOF AND, IN THE FUTURE, MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT.
FOR HAWAII RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
HAWAII UNIFORM SECURITIES ACT IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION PURSUANT
TO SECTION 485-6(15) H.R.S. THEREUNDER, AND THEREFORE, CANNOT BE RESOLD OR TRANSFERRED
UNLESS DULY REGISTERED OR QUALIFIED FOR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS.
FOR IDAHO RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IDAHO
SECURITIES ACT (THE "ACT") AND MAY BE TRANSFERRED OR RESOLD BY RESIDENTS OF IDAHO ONLY IF
REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE INVESTMENT IS SUITABLE IF IT DOES NOT EXCEED 10% OF THE INVESTOR'S NET
WORTH.
FOR ILLINOIS RESIDENTS: THE SECURITIES OFFERED HEREBY WILL BE SOLD TO, AND ACQUIRED BY
PURCHASERS IN A TRANSACTION EXEMPTED UNDER SECTION 4.0 OF THE ILLINOIS SECURITIES LAW OF
1953, AS AMENDED. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF
ILLINOIS. UNLESS THESE SECURITIES ARE SO REGISTERED, THEY MAY NOT BE OFFERED FOR SALE OR
RESOLD IN THE STATE OF ILLINOIS, EXCEPT AS A SECURITY, OR IN A TRANSACTION EXEMPTED UNDER
SAID ACT. PURCHASERS MUST HAVE EITHER (i) A NET WORTH OR A JOINT NET WORTH WITH THE
INVESTOR’S SPOUSE OF AT LEAST $1,000,000, OR (ii) AN INDIVIDUAL OR JOINT INCOME WITH THE
INVESTOR’S SPOUSE IN EXCESS OF $80,000 IN THE CURRENT YEAR, OR (iv) IS NOT A NATURAL PERSON
AND IN WHICH AT LEAST 90% OF THE EQUITY INTEREST IS OWNED BY PERSONS WHO MEET EITHER THE
NET WORTH OR INCOME AND NET WORTH REQUIREMENT ABOVE.
OF THE DELAWARE SECURITIES ACT AND RULE 9(b)(9)(II) THEREUNDER. THESE SECURITIES CANNOT BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE
SUBSEQUENTLY REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Page 6
FOR INDIANA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 3 OF THE
INDIANA BLUE SKY LAW AND ARE OFFERED PURSUANT TO AN EXEMPTION PURSUANT TO SECTION 23-21-2(b)(10) THEREOF AND MAY BE TRANSFERRED OR RESOLD ONLY IF SUBSEQUENTLY REGISTERED OR IF
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME. INDIANA REQUIRES INVESTOR SUITABILITY STANDARDS OF A NET WORTH (EXCLUSIVE OF HOME,
FURNISHINGS, AND AUTOMOBILES) OF THREE TIMES THE INVESTMENT BUT NOT LESS THAN $75,000 OR A
NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS, AND AUTOMOBILES) OF TWICE THE INVESTMENT BUT
NOT LESS THAN $30,000 AND GROSS INCOME OF $30,000. RESIDENTS OF INDIANA MUST HAVE (i) A NET
WORTH (EXCLUSIVE OF HOME, FURNISHING AND AUTOMOBILES) OF THREE (3) TIMES THE INVESTMENT
BUT NOT LESS THAN $75,0000 OR (ii) A NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES) OF TWICE THE INVESTMENT BUT NOT LESS THAN $30,000 AND A GROSS INCOME OF
$30,000.
FOR IOWA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE IOWA UNIFORM
SECURITIES ACT (THE "ACT") AND ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER SECTION
502.203(9) OF THE ACT. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED
OF TO ANY PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR KANSAS RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION
UNDER THE KANSAS SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS NOT BEEN FILED WITH THE KANSAS SECURITIES COMMISSION. THEREFORE, THESE SECURITIES
CANNOT BE RESOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER APPLICABLE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR KENTUCKY RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION
UNDER THE KENTUCKY SECURITIES ACT. THE KENTUCKY SECURITIES ADMINISTRATOR NEITHER
RECOMMENDS NOR ENDORSES THE PURCHASE OF ANY SECURITY, NOR HAS THE ADMINISTRATOR
PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION PROVIDED HEREIN, ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. RESIDENTS OF KENTUCKY MUST HAVE
EITHER (i) A NET WORTH OF AT LEAST $100,000 OR (ii) A NET WORTH OF AT LEAST $535,000 AND AN
ANNUAL INCOME OF AT LEAST $25,000.
FOR LOUISIANA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE LOUISIANA SECURITIES LAW, BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE INVESTMENT
IS SUITABLE IF IT DOES NOT EXCEED 25% OF THE INVESTOR'S NET WORTH.
FOR MAINE RESIDENTS: THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER SECTION 10502(2)(R)
OF TITLE 32 OF THE MAINE REVISED STATUTES, THESE SECURITIES MAY BE DEEMED RESTRICTED
SECURITIES AND AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE SECURITIES UNLESS
PURSUANT TO REGISTRATION UNDER STATE OR FEDERAL SECURITIES LAWS OR UNLESS AN EXEMPTION
UNDER SUCH LAWS EXISTS.
NOTICE TO MARYLAND RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE MARYLAND SECURITIES ACT BY REASON OF SPECIFIC
EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE
SECURITIES CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY
UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
MARYLAND SECURITIES ACT, IF SUCH REGISTRATION IS REQUIRED.
FOR MASSACHUSETTS RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
MASSACHUSETTS UNIFORM SECURITIES ACT OR THE SECURITIES ACT OF 1933, AS AMENDED, BY REASON
OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR
ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
Page 7
FOR MICHIGAN RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE MICHIGAN SECURITIES ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION CONTAINED
IN RULE 451,803.7 OF SUCH ACT. THE TRANSFERABILITY AND SALE OF THE SECURITIES ARE SUBJECT TO
RESTRICTIONS WHICH ARE SET FORTH HEREIN. THE TOTAL INVESTMENT IN UNITS FOR ANY MICHIGAN
PURCHASER WHO IS NOT AN ACCREDITED INVESTOR MUST NOT EXCEED TEN PERCENT OF HIS NET
WORTH (EXCLUSIVE OF RESIDENCE, FURNISHINGS AND AUTOMOBILES).
FOR MINNESOTA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY CHAPTER
OF THE MINNESOTA SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO REGISTRATION, OR AN EXEMPTION THEREFROM.
FOR MISSISSIPPI RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CERTIFICATE OF
REGISTRATION ISSUED BY THE SECRETARY OF STATE OF MISSISSIPPI PURSUANT TO RULE 477, WHICH
PROVIDES A LIMITED REGISTRATION PROCEDURE FOR CERTAIN OFFERINGS. THE SECRETARY OF STATE
DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES THE SECRETARY
OF STATE PASS UPON THE TRUTH, MERITS, OR COMPLETENESS OF ANY OFFERING MEMORANDUM FILED
WITH THE SECRETARY OF STATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR MISSOURI RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE MISSOURI UNIFORM SECURITIES ACT, BY REASON OF SPECIFIC
UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
FOR MONTANA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF MONTANA, BY REASON OF SPECIFIC
AVAILABLE.
FOR NEBRASKA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES ACT OF NEBRASKA, BY REASON OF SPECIFIC
AVAILABLE.
FOR NEVADA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE NEVADA SECURITIES ACT, BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT
BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR NEW HAMPSHIRE RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE NEW HAMPSHIRE UNIFORM SECURITIES ACT, BY REASON
OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY THE OFFERING.
ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE INVESTMENT IS SUITABLE IF IT DOES NOT EXCEED 10% OF THE INVESTOR'S NET
WORTH.
FOR NEW JERSEY RESIDENTS: PROSPECTIVE INVESTORS WHO ARE NEW JERSEY RESIDENTS AND WHO
ACCEPT AN OFFER TO PURCHASE THE UNITS PURSUANT TO THIS MEMORANDUM ARE HEREBY ADVISED
THAT THIS PRIVATE PLACEMENT MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE
DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE STATE OF NEW JERSEY PRIOR TO ITS ISSUANCE AND
THE MASSACHUSETTS UNIFORM SECURITIES ACT IF SUCH REGISTRATION IS REQUIRED. UNDER THE
MASSACHUSETTS UNIFORM SECURITIES ACT, AN ACCREDITED INVESTOR WHO IS A NATURAL PERSON
SHALL NOT INVEST MORE THAN 25% OF HIS NET WORTH (EXCLUDING HIS PRINCIPAL RESIDENCE AND
ITS FURNISHINGS) BUT INCLUDING THE NET WORTH OF HIS OR HER SPOUSE.
Page 8
USE. NEITHER THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY NOR THE BUREAU OF
SECURITIES HAS PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
FOR NEW MEXICO RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES BUREAU OF THE NEW MEXICO DEPARTMENT OF REGULATION AND LICENSING, NOR
HAS THE SECURITIES BUREAU PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR NEW YORK RESIDENTS: THIS PRIVATE OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY
THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF
NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL. THIS MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF
A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
MADE. IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, THE STATEMENTS MADE IN
THIS MEMORANDUM ARE NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS
OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.
FOR NORTH CAROLINA RESIDENTS: IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON
THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF
THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO THE RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
RESIDENTS OF NORTH CAROLINA MUST HAVE EITHER (i) A NET WORTH OF AT LEAST $400,000 OR (ii) A
NET WORTH OF AT LEAST $25,000 AND AN INCOME OF AT LEAST $25,000.
FOR NORTH DAKOTA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES COMMISSIONER OF THE STATE OF NORTH DAKOTA NOR HAS THE COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
FOR OHIO RESIDENTS: THE UNITS AND THEIR COMPONENT SECURITIES ARE BEING OFFERED PURSUANT
TO AN EXEMPTION FROM FEDERAL REGISTRATION UNDER SECTION 4(2) OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND/OR REGULATION D PROMULGATED THEREUNDER, AND PURSUANT TO AN
EXEMPTION FROM REGISTRATION IN THE STATE OF OHIO UNDER OHIO REVISED CODE SECTIONS
1707.03(D) AND SECTION 1707.03(Q). THIS OFFERING HAS NOT BEEN APPROVED OR DISAPPROVED UNDER
THE OHIO SECURITIES ACT, AS AMENDED, OR BY THE OHIO DEPARTMENT OF COMMERCE, DIVISION OF
SECURITIES, NOR HAS THE DIVISION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRIVATE
PLACEMENT MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR OKLAHOMA RESIDENTS: THE SECURITIES REPRESENTED BY THIS MEMORANDUM HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE OKLAHOMA SECURITIES ACT.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND/OR THE OKLAHOMA SECURITIES ACT, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
ACTS.
FOR OREGON RESIDENTS: IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
DETERMINED THE ADEQUACY OF THE DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Page 9
(1) EACH PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR SHARES MUST EXECUTE AND DELIVER TO
THE COMPANY THE ENCLOSED SUBSCRIPTION AGREEMENT WHEREBY THE SUBSCRIBER AGREES
NOT TO SELL SUCH SECURITIES PURCHASED BY HIM FOR A PERIOD OF TWELVE (12) MONTHS FROM
THE DATE OF PURCHASE THEREOF; AND
(2) EACH PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR ANY SHARES HAS THE RIGHT, PURSUANT
TO SECTION 207 OF THE PENNSYLVANIA SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION AND
RECEIVE A FULL REFUND OF ALL MONIES PAID, WITHIN TWO (2) BUSINESS DAYS AFTER THE
EXECUTION OF THE SUBSCRIPTION AGREEMENT OR PAYMENT FOR SUCH SHARES HAS BEEN MADE,
WHICHEVER IS LATER. WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY SUCH
PERSON. TO ACCOMPLISH THIS WITHDRAWAL A SUBSCRIBER NEED ONLY SEND A LETTER OR
TELEGRAM TO THE COMPANY, INDICATING HIS INTENTION TO WITHDRAW. SUCH LETTER OR
TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED
SECOND BUSINESS DAY. IT IS PRUDENT TO SEND SUCH LETTER BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO ENSURE IT IS RECEIVED, AND TO EVIDENCE THE TIME WHEN IT WAS
MAILED. IF A REQUEST IS MADE ORALLY (IN PERSON OR BY PHONE), WRITTEN CONFIRMATION
SHOULD BE REQUESTED THAT IT HAS BEEN RECEIVED.
FOR RHODE ISLAND RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE BLUE SKY LAW OF RHODE ISLAND, BY REASON OF
SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
AVAILABLE.
FOR SOUTH CAROLINA RESIDENTS: IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON
THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR SOUTH DAKOTA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER CHAPTER
47-31 OF THE SOUTH DAKOTA SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION, EXEMPTION THEREFROM, OR
OPERATION OF LAW. EACH SOUTH DAKOTA RESIDENT PURCHASING ONE OR MORE WHOLE OR
FRACTIONAL UNITS MUST WARRANT THAT HE HAS EITHER (1) A MINIMUM NET WORTH (EXCLUSIVE OF
HOME, FURNISHINGS AND AUTOMOBILES) OF $30,000 AND A MINIMUM ANNUAL GROSS INCOME OF
$30,000 OR (2) A MINIMUM NET WORTH (EXCLUSIVE OF HOME, FURNISHINGS AND AUTOMOBILES) OF
$75,000. ADDITIONALLY, EACH INVESTOR WHO IS NOT AN ACCREDITED INVESTOR OR WHO IS AN
ACCREDITED INVESTOR SOLELY BY REASON OF HIS NET WORTH, INCOME OR AMOUNT OF INVESTMENT,
SHALL NOT MAKE AN INVESTMENT IN THE PROGRAM IN EXCESS OF 20% OF HIS NET WORTH (EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES).
FOR TENNESSEE RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE TENNESSEE SECURITIES ACT OF 1980, BY REASON OF SPECIFIC
AVAILABLE.
FOR PENNSYLVANIA RESIDENTS: SHARES SOLD TO RESIDENTS OF THE COMMONWEALTH OF
PENNSYLVANIA CAN ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF THE
PENNSYLVANIA SECURITIES ACT SUBJECT TO THE FOLLOWING CONDITIONS. RESIDENTS OF
PENNSYLVANIA MAY NOT SUBSCRIBE FOR AMOUNTS IN EXCESS OF 20% OF THEIR NET WORTH.
Page 10
NOTICE TO TEXAS RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF
EXEMPTION UNDER THE TEXAS SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS NOT BEEN FILED WITH THE TEXAS SECURITIES COMMISSION THEREFORE, THESE
SECURITIES CANNOT BE RESOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER
APPLICABLE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE SECURITIES
HEREIN DESCRIBED HAVE NOT BEEN QUALIFIED OR REGISTERED FOR SALE IN TEXAS. ANY
REPRESENTATION TO THE CONTRARY OR CONSUMMATION OF SALE OF THESE SECURITIES IN TEXAS
PRIOR TO QUALIFICATION OR REGISTRATION THEREOF IS A CRIMINAL OFFENSE.
FOR UTAH RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE UTAH UNIFORM SECURITIES ACT, BY REASON OF SPECIFIC
AVAILABLE.
FOR VERMONT RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE VERMONT SECURITIES ACT, BY REASON OF SPECIFIC
AVAILABLE.
FOR VIRGINIA RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE VIRGINIA SECURITIES ACT, BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT
BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY ARE
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR WASHINGTON RESIDENTS: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT. THE WASHINGTON ADMINISTRATOR OF SECURITIES HAS NOT REVIEWED
OR RECOMMENDED THIS OFFERING OR THIS MEMORANDUM AND THE SECURITIES OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF WASHINGTON, CHAPTER 21.20 RCW, AS
AMENDED, AND THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE
SECURITIES ACT AND THE SECURITIES ACT OF WASHINGTON CHAPTER 21.20 RCW OR UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
FOR WEST VIRGINIA RESIDENTS: THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF
EXEMPTION UNDER THE UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING THESE
SECURITIES HAS NOT BEEN FILED WITH THE WEST VIRGINIA SECURITIES COMMISSIONER. THE
COMMISSIONER DOES NOT RECOMMEND NOR ENDORSE THE PURCHASE OF ANY SECURITIES, NOR DOES
IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS PRIVATE PLACEMENT MEMORANDUM. ANY
REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR WISCONSIN RESIDENTS: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE WISCONSIN UNIFORM SECURITIES LAW, BY REASON OF
SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING.
AVAILABLE. RESIDENTS OF WISCONSIN MUST HAVE EITHER (i) A NET WORTH OF $75,000 OR (ii) A NET
WORTH OF AT LEAST $30,000 AND AN ANNUAL GROSS INCOME OF AT LEAST $30,000.
FOR WYOMING RESIDENTS: PURCHASERS MUST HAVE EITHER (i) A NET WORTH OF AT LEAST
$250,000. OR (ii) INVEST NO MORE THAN 20% OF THEIR NET INCOME. IN MAKING ALL SUCH
CALCULATIONS SUBSCRIBERS MUST EXCLUDE FROM THE CALCULATION OF SUCH NET WORTH THE FAIR
MARKET VALUE OF THEIR HOMES, FURNISHINGS AND AUTOMOBILES. RESIDENTS OF WYOMING MUST
HAVE EITHER (i) A NET WORTH OF AT LEAST $250,000 OR (ii) INVEST NO MORE THAN 20% OF THEIR NET
INCOME. IN MAKING ALL SUCH CALCULATIONS, SUBSCRIBERS MUST EXCLUDE FROM THE CALCULATION
OF SUCH NET WORTH THE NET FAIR MARKET VALUE OF THEIR HOMES, FURNISHINGS AND
AUTOMOBILES.
Page 11
All original documentation and information with respect to this Offering is retained in the office of the General Partner,
SWANsat 1, Inc., whose mailing address is 215 E. Orangethorpe Avenue, #300, Fullerton, CA 92832-3017, tel: 714-7381938, fax: 831-417-5270, e-mail: [email protected]. All references herein to all contracts or other agreements, including,
but not limited to, the Partnership Agreement, are qualified in their entirety by reference to each such document. Prospective
investors may, at any time (during normal business hours) prior to the sale of the Units, ask questions concerning the Offering
and request additional information necessary to verify such information. The General Partner will provide answers to such
questions and provide such information to the extent such answers and information are possessed by the General Partner or
can be obtained by it without unreasonable effort or expense.
GLOSSARY OF TERMS
The following are definitions of certain terms used in this Memorandum:
Act: The Securities Act of 1933, as amended.
Affiliate or Affiliates of the General Partner: Any Person which, directly or indirectly, controls, is controlled by, or is
under common control with the General Partner.
Capital Account: The aggregate of cash contributions of a Partner increased by such Partner’s share of Distributable
Revenues and profits from the Partnership, and decreased by a pro rata allocation of losses from the partnership.
Capital Contribution: The amount of cash contributed by a Partner to the Partnership.
Code: The Internal Revenue Code of 1986, as amended.
Deferment: Payments to third parties, including management, which are paid prior to Recoupment of Capital Contributions
by the Limited Partners.
Distributions: All disbursements of cash or property by the Partnership to the Partners in accordance with the Partnership
Agreement.
Effective Date: The date on which the Partnership is formed under California law.
Fiscal Year: The calendar year ending on December 31 of each year.
Frequencies: The 92-95 GHz and 102-105 GHz electromagnetic frequency bands located in Band 11 of the Extremely High
Frequency (EHF) 30-300GHz band described in §2.101 Nomenclature of Frequencies contained in Subpart B: Allocation,
Assignment, and Use of Radio Frequencies set forth in the Rules of the Federal Communications Commission of the United
States of America.
General Partner: SWANsat 1, Inc., a Wyoming corporation.
Gross Receipts: All sums received by the Partnership from all sources whatsoever from the sale, distribution, and
exploitation of the SWANsat Subscriber Accounts and any rights attributed thereto including sums payable upon the
liquidation of the Partnership’s assets.
Investor Representation Letter: The prospective purchaser letter in the form included in the attachment to this
memorandum.
Limited Partner(s): Any Person that executes the Limited Partnership Agreement, either personally or by a duly constituted
attorney-in-tact, and is qualified and accepted by the General Partner as a Limited Partner.
Limited Partnership Agreement: The form of Limited Partnership Agreement attached to this Memorandum.
Memorandum: This Confidential Private Offering Memorandum.
Offering: The offering of Units being made pursuant to this Memorandum.
Pari Passu: Ratably; pro rata.
ADDITIONAL INFORMATION
Page 12
Partners: The Limited Partners and the General Partner, collectively, when no distinction is required by the context in which
the term is used.
Partnership: SWANsat Territory 1, Ltd., a California limited partnership.
Person: An individual, firm, partnership, corporation, estate, trust, pension, profit-sharing plan, or other entity.
Preferred Capital Contribution: Capital contributed to the Partnership which is not raised through the sale of Partnership
Units. Investors in this category do not necessarily become Limited Partners and may not necessarily participate in the profits
of the partnership based on their capital contribution. Such investors are in first position for repayment out of the proceeds
raised by the Private Placement Memorandum. Preferred Capital Contributions may be exchanged dollar-for-dollar for Units
in the Partnership.
Presales: A distribution or sales contract for SWANsat Subscriber Accounts, or for a block of Subscriber Accounts, and any
ancillary rights thereto prior to the launch and operation of the SWANsat System.
Principal Office: The principal office and place of business of the Partnership and the place where the records of the
Partnership exist.
Purchaser: A natural person, corporation, trust, partnership, or other legal entity that purchases Units in the Partnership.
Recoup: To repay or recover; to make up for.
Regulation D: Regulation D promulgated under the Act.
Subscription Agreement: The subscription agreement in the form included with this memorandum pursuant to which a
prospective Limited Partner subscribes for Units.
Taxable Income or Tax Loss: With respect to any fiscal year, the taxable income or tax loss recognized by the Partnership
for federal income tax purposes.
Termination Date: 365 days from the date of this Memorandum., unless extended by the General Partner.
Territory: North America, including the United States, Canada, Bermuda and Greenland
Transfer: To sell, assign, transfer, give, donate, pledge, deposit, alienate, bequeath, devise, or otherwise dispose of or
encumber to any person other than the Partnership.
Unit(s): The interest of a Limited Partner in the Partnership representing such Limited Partner’s rights, powers, and privileges
as specified in the Partnership Agreement.
HOW TO SUBSCRIBE
Each prospective Purchaser of Units will be required to complete and execute and return to the General Partner the documents
set forth below:
1.
One (1) executed copy of the AGREEMENT OF LIMITED PARTNERSHIP, which contains certain
representations and a power of attorney.
2.
One (1) completed and executed copy of the Investor Representation Letter.
3.
One (1) completed and executed copy of the RISK DISCLOSURE STATEMENT AND AGREEMENT.
4.
One (1) executed COUNTERPART SIGNATURE PAGE for the Agreement of Limited Partnership.
5.
A CERTIFIED CHECK or MONEY ORDER made payable in United States dollars (USD) to “SWANsat Territory
1, Ltd.” in an amount equal to the price of the Units desired.
Page 13
A substantial number of state securities commissions and securities industry associations have established investor suitability
standards for the marketing within their respective jurisdictions of private offerings of securities. Some have also established
minimum dollar levels for purchases in their states. There are several apparent reasons for these standards, including, among
others, the speculative nature of such offerings and the relative lack of liquidity of securities sold in such offerings as
compared with other securities investments. Additionally, there is concern about the sophistication of investors and their
ability to sustain the loss of their investment in the event a transaction is not successful. Moreover, the sale of the securities
offered hereby is further limited by the Act and various state laws.
Each potential investor must complete a RISK DISCLOSURE STATEMENT AND AGREEMENT in the form included
herein for review by the General Partner in order confirm to the satisfaction of the General Partner that the Purchaser fully
understands the risks of investing in the Partnership, and that the Purchaser is willing to bear the possible loss of his/her entire
investment in the Partnership.
Each potential investor must complete an Investor Representation Letter in the form included herein for review by the
General Partner in order to determine suitability. As a minimum, each investor in the Partnership must meet at least one of the
following criteria:
1.
Be a director or executive officer of the Partnership;
2. Have a pre-existing personal and/or business relationship with the General Partner consisting of personal or business
contacts of a nature and duration which enables the investor to be aware of the character, business acumen and general
business and financial circumstances of the person with whom such relationship exists.
3. Have the capacity to protect their own interests in connection with the subject investment by reason of their business
and/or financial experience.
4.
Meet one of the net worth or individual income requirements listed below:
a. Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his
purchase exceeds $1,000,000; or
b. Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or
joint income with that person’s spouse in excess of $200,000 in each of those years and who has a reasonable
expectation of reaching the same income level in the current year.
5. Have the capacity to protect their own interests in connection with the subject investment by reason of consultations
with a professional financial advisor who has agreed to be a designated purchaser representative in connection with this
transaction (a letter of representation from the professional advisor is required in this case).
6. Is the spouse, relative, or relative of the spouse of another purchaser of interests, and they share the same principal
residence as that purchaser.
Each investor should understand that the purchase of Units is suitable only for persons of adequate financial means
who have no need for liquidity in this investment in that (a) an investor may not be able to liquidate his investment in
the event of an emergency; (b) transferability is extremely limited; and (c) an investor could sustain a complete loss of
the entire investment.
SUMMARY OF THE OFFERING
The Partnership
The Partnership is a limited partnership formed in California pursuant to California law for the purpose of purchasing an
Option from SWANsat Marketing, LLC and/or Leading Edge Technologies, LLC (“LET”) to market the satellite-delivered,
high-power broadband telecommunication services described in “DESCRIPTION OF PROPOSED BUSINESS” on page 17
below. SWANsat 1, Inc., a Wyoming corporation, is the General Partner of the Partnership and is wholly or substantially
owned by SWANsat Marketing, LLC. The Partnership intends to put forth its “best efforts” to market the SWANsat Services
through not less than 1,000,000 individual Subscribers Accounts beginning in 2009 or 2010 and, toward that end, the
SUITABILITY STANDARDS
Page 14
Partnership may be required to acquire additional capital or credit lines, or to utilize other methodologies to finance the
Partnership’s pro rata share of LET’s costs to design, construct, insure, and launch the SWANsat satellites needed to
effectuate the SWANsat Services, as more fully set forth below. See “DESCRIPTION OF PROPOSED BUSINESS,” page
17, and “SUMMARY OF PARTNERSHIP AGREEMENT,” page 26.”
General Partner’s Address and Telephone Numbers
The contact address and telephone number of the General Partner is: SWANsat 1, Inc., 215 E. Orangethorpe Avenue, #300,
Fullerton, CA 92832-3017, toll free from the United States and Canada: 888-SWANsat (1-888-792-6728), tel: 714-738-1938,
fax: 831-417-5270, e-mail: [email protected]. The contact address and telephone numbers for SWANsat Marketing, LLC
and for LET are the same as the address and telephone numbers of the General Partner.
The Offering
The General Partner plans to offer on behalf of the Partnership up to 100,000 Units, each Unit being priced at $10,000, for a
total of up to $1,000,000,000. The Offering is made in two Funding Rounds. Offering Round 1 is for $2,000,000 in cash, for
which the Limited Partners will receive up to 1% of the profits and losses from the business of the Partnership. In the event
that the Partnership is unable to convince lenders or other financial sources to provide the funding to complete the design,
construction, insurance, launch, and operation of the SWANsat System, as further described herein and in the General
Partner’s Marketing Plan and Information Memorandum, the Partnership may have to sell additional Units in the
Partnership, up to a maximum of $1,000,000,000, for which the Offering Round 2 Limited Partners will receive up to an
additional 14% of the profits and losses from the business of the Partnership.
Holders of Units have certain voting rights with respect to those matters which are required to be submitted to a vote of all of
the Partners. See “SUMMARY OF PARTNERSHIP AGREEMENT,” page 26. Holders of Units also have the right to certain
allocations and distributions. Such voting, allocation and distribution rights are based upon the number of Units outstanding.
No Partner has any preemptive rights other than as set forth in the Partnership Agreement. See “SUMMARY OF
PARTNERSHIP AGREEMENT,” page 26. The ownership of a Unit will not subject a Limited Partner to any personal
liability for Partnership expenses, obligations, or liabilities, except as set forth under “SUMMARY OF PARTNERSHIP
AGREEMENT,” page 26. Transferability of all Units is restricted. See “Limited Transferability of Unit,” page 28. The Units
are subject to dilution. See “Dilution of Interest of a Limited Partner,” page 26.
If at least $2,000,000 has not been subscribed for on or before the Termination Date, or if no Preferred Capital Contributor
has loaned capital to the Partnership on or before the Termination Date, then this Offering will be terminated, no Units will be
sold, and, with the exception of moneys collected from Preferred Capital Contributors (if any), all funds collected will be
promptly returned to the investors together with any interest earned thereon. If the Total Amount has been subscribed for prior
to the Termination Date, then a Closing will be promptly held with respect to such Units. The General Partner and its
principals and Affiliates may purchase Units for their own account on such terms as the General Partner, in its sole discretion,
may determine to be in the best interest of the Partnership.
The General Partner, in its sole discretion, may accept or reject offers to subscribe. The General Partner and its principals and
Affiliates may (but are not obligated to) purchase Units on and under the same basis and under the same terms and conditions
as other investors.
Risk Factors
THIS OFFERING INVOLVES RISKS. See “RISK FACTORS,” page 22 and “RISK DISCLOSURE STATEMENT AND
AGREEMENT” below.
Method of Subscription
Offers to purchase Units may be made only through the General Partner. See “HOW TO SUBSCRIBE,” page 12.
Each Prospective Limited Partner desiring to purchase Units must deliver to the General Partner an executed AGREEMENT
OF LIMITED PARTNERSHIP, a completed RISK DISCLOSURE STATEMENT AND AGREEMENT and a completed
Investor Representation Letter, along with an executed COUNTERPART SIGNATURE PAGE for the Agreement (the forms
of which are included herein), together with a certified check or money order made payable in United States dollars (USD) to
“SWANsat Territory 1, Ltd.”. See “HOW TO SUBSCRIBE,” page 12.
Page 15
The Partnership will purchase from the General Partner an Option to market and sell, throughout the Subscriber Account
Territory, Services on the SWANsat System to end-user Subscribers. The Subscriber Account price for the SWANsat Services
has not been set at the time of publication of this Offering Memorandum, but is expected to retail for not less than US$80.00
per month and not more than US$160.00 per month, including the lease/purchase of the SWANsat basic handset. The
Partnership is expected to retain sales executives and managers, and will provide to SWANsat Marketing, LLC, a “best
efforts” commitment to sell the 1,000,000 Subscriber Accounts authorized under the Partnership’s Option Agreement.
SWANsat Territory 1, Ltd. has been licensed to market to Territory #1, as set forth in the SAT table below. Said Territory #1
consists of North America, including the United States, Canada, Bermuda and Greenland.
SAT
CODE
1
2
3
4
5
6
7
8
Subscriber Account Territory (SAT) Name
North America
Central & South America, Caribbean
UK & Europe
Asia, Australia & NZ, Oceania
Africa
India
Middle East
China
Country
Count
5
47
45
45
56
1
25
3
1
Population
Now (2003)
322,677,510
554,998,441
574,412,736
1,443,644,392
857,341,840
1,049,700,118
182,739,018
1,316,972,638
Population at
Launch (2008)
337,633,815
589,768,747
576,592,782
1,532,366,791
944,990,259
1,125,368,288
203,478,323
1,356,845,573
Source of Purchase Option Funding
The funds for the purchase of the Option will come from two sources. The first source is through the Units sold via this
Offering. The second source is in the form of a private investor (or investors) who will provide $100,000 to the Partnership in
the form of a Preferred Capital Contribution. The Preferred Capital Contributor may, at his sole discretion, choose to become
a limited partner, and may thereby share in profits based on the capital contribution beyond a return of 10% of his investment.
This Preferred Capital Contribution will be in first position for repayment. See “Allocation of Gross Receipts and
Recoupment,” page 15.
The assumptions, estimates, and proposed allocations of expenditures are estimates only and are expected to vary. Any
variations that occur are not expected to be material in the aggregate. There have been no independent appraisals of the
budget for the design, construction and launch of the SWANsat System. The budget may be subject to cost overruns. See
“DESCRIPTION OF PROPOSED BUSINESS,” page 17. The expected amortized cost for the Partnership’s share of the
design, construction, insurance, and launch of the SWANsat System is $1,000,000,000. The total cost for the entire global
SWANsat System (including in-orbit on-station operational spare spacecraft) is approximately $5,600,000,000.
For information about where the satellites are expected to reside on station, see “About the Geostationary Orbital Slots,” page
20.
Allocation of Gross Receipts and Recoupment
All Gross Receipts of the Partnership shall be allocated in the following order of priority:
1.
The General Partner shall receive compensation of $5,000 per week retroactive to the Offer Date as an expense to the
Partnership.
2.
Pay the operating expenses of the Partnership, including amortized costs for the design, construction, insurance, launch,
and replacement costs of the satellites and the Satellite Network Operation Center(s) (SNOCs), and any deferred
payments to management.
3.
Pay for the Partnership’s on-going pro rata share of the promotion and advertising of the SWANsat System, including a
fee of 5% of gross billings for the funding of independently produced family-oriented theatrical motion pictures which
will be distributed through the SWANsat System to Subscribers as part of the entertainment service distributed by
SWANsat.
1
Population estimates are taken from the U.S. world census, 2002.
Subscriber Account Territory Option
Page 16
4.
Pay for the establishment of a reasonable reserve, as may be set aside by the General Partner in its discretion from time to
time for the anticipated expenses of the Partnership, the remainder of which reserve will be distributed upon the
liquidation of the Partnership.
5.
Repay any Preferred Capital Contributions until the Preferred Capital Contributors have recouped an amount equal to
110% of their Preferred Capital Contributions.
6.
Repay the Limited Partners until they have recouped an amount equal to their Capital Contributions.
7.
Further Gross Receipts, if any after all of the above allocations, shall be characterized as Profits and will be paid 20% to
the Limited Partners in the same proportions as their Capital Contributions bear to the aggregate Capital Contributions of
$1,000,000,000 from all Limited Partners (including in the sum of said aggregate Capital Contributions), and 80% to the
General Partner.
Allocations of Losses
Taxable losses of the Partnership will be allocated 99% to the Limited Partners, pro rata to the extent of their Capital
Contributions, and 1% to the General Partner in the first three years of the Partnership. Thereafter, to the extent of any taxable
Income, the General Partner and Limited Partners shall share Taxable Losses pro rata in the same proportions as they are
entitled to share Profits; provided that any Taxable Losses suffered or incurred in excess of previously allocated Taxable
Income shall be allocated 100% to the General Partner. See “SUMMARY OF PARTNERSHIP AGREEMENT,” page 26.
Distribution of Partnership Assets Upon Liquidation
Upon liquidation of the Partnership, the assets of the Partnership will be sold and the proceeds will be distributed, after
satisfaction of all debts and liabilities of the Partnership, if any, and the creation of a reasonable reserve for contingent
liabilities, as distributions of Gross Receipts in the order of priority described under “Allocation of Gross Receipts and
Recoupment,” page 15.
Management
The General Partner will have exclusive responsibility, subject to certain limitations set forth in the Partnership Agreement,
for the management and control of the Partnership’s business affairs, and, unless otherwise set forth in the Partnership
Agreement, no Limited Partner will participate in the management or control of the Partnership’s activities. See
“FIDUCIARY RESPONSIBILITY OF THE GENERAL PARTNER,” page 21, and “SUMMARY OF PARTNERSHIP
AGREEMENT,” page 26.
Partnership Fiscal Year
The Partnership fiscal year shall be the calendar year, ending December 31 of each year.
Termination Date of the Partnership
The “Termination Date” of the Partnership shall be December 31, 2030, unless sooner terminated. See “SUMMARY OF
PARTNERSHIP AGREEMENT,” page 26.
PARTNERSHIP OBJECTIVES AND POLICIES
The principal objectives of the Partnership are:
1.
To protect the investment principal of the Partners, and
2.
To realize capital appreciation upon the marketing of the Subscriber Accounts and/or the rights thereto.
Neither this Offering nor the Partnership is intended to be, or to operate as, a tax shelter. The Partnership anticipates making a
profit from the sale of Subscriber Accounts to individuals and/or to corporate end-users. It is not now possible to determine
when or if such sales or will be made. The General Partner has the right to sell, lease or dispose of the marketing rights to the
Subscriber Accounts in the Territory and/or Subscriber Accounts or any rights thereto on behalf of the Partnership at any time
and on such terms and conditions as the General Partner deems appropriate. See “SUMMARY OF PARTNERSHIP
AGREEMENT,” page 26.
Page 17
The Partnership does not intend to provide Limited Partners with any significant tax losses. Thus, investors should not expect
to obtain material tax losses from investment in the Partnership to offset “passive” taxable income from other sources. See
“CERTAIN FEDERAL INCOME TAX CONSIDERATIONS AND RISKS,” page 24. The Partnership intends to operate in
such a manner as not to be required to register as an investment company under the Investment Company Act of 1940.
The Partnership intends to market the Subscriber Accounts only in the Territory (as
set forth in the SAT Allocation Table on page 15 above), in a manner advantageous
to the Partnership with a view to achieving the Partnership’s investment objectives.
In deciding what action to take, the General Partner will consider factors such as
potential profit, capital appreciation, and federal income tax considerations,
including possible adverse federal income tax consequences to the partnership as a
whole. The Partnership has no obligation to market its Subscriber Accounts if such
sale would not be beneficial to the Partnership or its Partners.
In connection with the marketing of the Subscriber Accounts by the Partnership,
percentage agreements or contingent contracts may be taken by the Partnership as a
partial payment, and, to that extent, any allocation of Distributable Revenues to
holders of Units may be delayed over the course of the terms of such agreements.
Payments made to the Partnership pursuant to these agreements may be affected by
the manner in which the Subscriber Accounts are sold and by prevailing economic
conditions.
The General Partner does not anticipate that the Partnership will issue other
securities, underwrite securities of other issuers, offer securities in exchange for
properties, make loans, repurchase or otherwise reacquire Units, or invest in the
securities of other issuers for the purpose of exercising control. The Partnership is
not expected to issue monthly, annual, or other reports to Partners other than Internal
Revenue Service Form K-1 for federal income tax purposes, or as otherwise may be
determined by the General Partner.
Notwithstanding the statements above with respect to the anticipated policies of the
Partnership, pursuant to the Partnership Agreement, the General Partner has the
discretion to alter any or all of the foregoing policies without a vote of the Limited
Partners.
Candidate for SWANsat Concept
Handset — The Origami
This design was not developed by
SWANsat or LET.
DESCRIPTION OF PROPOSED BUSINESS
About the SWANsat Service
SWANsat Territory 1, Ltd. is a limited partnership formed to market the SWANsat services as described herein in the sales
territory as set forth below, which is more specifically designated and limited to North America, including the United States,
Canada, Bermuda and Greenland.
The advent of digital CODECing technologies and ubiquitous acceptance of the Internet have gradually but inevitably melded
together the broadcast, computer networking, and telecommunications industries so thoroughly and completely through the
common medium of digital transmission protocols that the boundaries that once separated these disciplines are being erased.
Digitalization of transmission technologies characterizes the Direct Broadcast Service, the Internet, Internet2, fiber optic
technologies supported by cable modems, 2.5G, 3G, emerging 4G (IMT-2000+) wireless protocols, and other technological
innovations too numerous to mention. Terrestrially-based cable companies have added telephone services and high speed
Internet services to their roster of service offerings. Convergent technologies continue to merge computer, telephone, and
television hardware, and emerging technologies like LMDS continue to blur and, in some cases remove, the boundaries
between traditional communications industries and broadband protocols, such as high-definition television and high-speed
Internet services.
THERE CAN BE NO ASSURANCE GIVEN THAT ANY OF THE FOREGOING OBJECTIVES WILL BE
ACHIEVED.
Page 18
Anticipating the logical direction in which all of these protocols are inexorably heading, Leading Edge Technologies, LLC has
developed the Super-Wide Area Network System, (the “SWANsat System”), an innovative constellation of three highpowered geosynchronous telecommunications satellites that will provide exponentially better telecommunications system
capability worldwide than any currently-existing system.
The exclusive worldwide territorial marketing rights to the SWANsat System have been sub-licensed exclusively to SWANsat
Marketing, LLC (the “SAT Licensor”) by Leading Edge Technologies, LLC, to which licensing authority for operation of the
SWANsat System has been granted by the Host Country. SWANsat will be utilized to meet information access bandwidth
needs of a subscriber through seamless integration into a single system, including:
1.
Telephone and fax services (with no tariffs whatsoever for local, domestic long-distance, or international longdistance calls)
2.
VoIP-based audio teleconferencing (with a virtually unlimited number of parties)
3.
Video conferencing services (full-motion, 30 frames FPS at up to 200kbs)
4.
Super-high speed Internet access (greater than 1Megabit/second access speeds)
5.
Email with integrated free user web pages for individuals
6.
Hundreds of educational and entertainment Direct Broadcast Service channels
7.
DVD-quality video
8.
CD-quality audio (commercially-sponsored and non-commercial)
Page 19
The long range goal of the Partnership is to ensure market acceptance of LET’s proprietary technology, the SWANsat System
concept. The Partnership’s mid-range objectives are to demonstrate that the SWANsat System concept can work and to
increase public, governmental, and industry awareness of LET’s technology.
Structure of the SWANsat Partnerships
Leading Edge Technologies, LLC, a privately-held Nevada limited liability corporation (“LET”), has been granted a permit to
design, construct, launch and operate a constellation of satellites that will operate in the 92-95GHz and 102-105 GHz electromagnetic frequency bands, which are defined as Band 11 of the Extremely High Frequency (EHF) 30-300GHz band described
in §2.101 Nomenclature of Frequencies contained in Subpart B: Allocation, Assignment, and Use of Radio Frequencies set
forth in the Rules of the Federal Communications Commission of the United States of America.
The Host Country granting the permit and licenses is not the United States of America. As of the date of this Private
Placement Memorandum, the licensing Host Country is Nauru, an independent island nation in Oceania (the “Host Country”).
The Host Country is a member of the United Nations and either is now a signatory to the International Telecommunications
Union treaty or is expected to become a signatory prior to launch of the SWANsat satellites.
LET has entered into a contractual relationship with SWANsat Marketing, LLC, a privately-held Wyoming corporation, by
which SWANsat Marketing, LLC owns and controls, for 25 years (and renewable in 25-year terms thereafter) the exclusive
world-wide right to market commercial and non-commercial Subscriber Accounts to individuals, corporations, and/or
governments throughout the world. Sales of Subscriber Accounts for military purposes have not been granted to any of
the subsidiary marketing companies or to the Limited Partnerships controlled by the subsidiary marketing companies.
SWANsat Marketing, LLC will not initially license individual Subscriber Accounts, but will instead authorize Subscriber
Area Territories (the “SAT Partnerships”) in specific geographic areas around the globe. This Partnership (SWANsat
Territory 1, Ltd.) is one of the eight SAT Partnerships.
The Master License Contract between LET and SWANsat Marketing, LLC enables SWANsat Marketing, LLC to establish
and own subsidiary companies for the purpose of establishing and/or developing one or more Subscriber Area Territories.
Eight SATs have been delineated as set forth below.
SAT
CODE
1
2
3
4
5
6
7
8
2
Subscriber Account Territory (SAT) Name
North America
UK & Europe
Africa
India
Middle East
China
Country
Count
5
52
48
42
59
2
24
3
Population
Now (2003)
322,677,510
554,998,441
574,412,736
1,443,644,392
857,341,840
1,049,700,118
182,739,018
1,316,972,638
Population at
Launch (2008)
337,633,815
589,768,747
576,592,782
1,532,366,791
944,990,259
1,125,368,288
203,478,323
1,356,845,573
If basic residential telephone service costs about $30 per month, with a second dedicated fax line costing about $15 per
month, cellular service costing about $50 per month (long distance charges included), high speed DSL Internet access costing
$50 per month, and reception of about 100 cable or DBS satellite channels costing about $70 per month, the total individual
end user’s information monthly information utility bill currently therefore runs no less than about $215 per month.
When fully deployed and operational, SWANsat will become the subscriber’s single information services wireless provider:
Instead of receiving a series of monthly bills totaling more than US$2152 for all of the services listed above, the subscriber
will only pay about 50% of that amount (perhaps as much as US$80-US$160 per month). SWANsat Marketing, LLC, through
its proposed Subscriber Account Territory Partners world wide, seeks to enter the domestic and international telecommunications markets for provision of all of the above services through one ubiquitous, seamless worldwide broadband network—
hence the system designator Super-Wide Area Network.
Page 20
About the SWANsat Subscriber Account Territories
SWANsat Marketing, LLC has established eight separate SAT Licensor corporations to serve as General Partners to
individual Subscriber Account Territory Partnerships. The duly authorized General Partners are named after the SAT
territories they are intended to represent. They include SWANsat 1, Inc.; SWANsat 2, Inc.; SWANsat 3, Inc.; SWANsat 4,
Inc., SWANsat 5, Inc., SWANsat 6, Inc., SWANsat 7, Inc., and SWANsat 8, Inc. (See the diagram on page 19). Each of these
General Partners are licensed to form Limited Partners to serve the Subscriber Account Territory assigned to it.
Accordingly, there are eight Limited Partnerships licensed to market individual Subscriber Accounts in eight SATs: SWANsat
Territory 1, Ltd.; SWANsat Territory 2, Ltd.; SWANsat Territory 3, Ltd.; SWANsat 4, Ltd.; SWANsat 5, Ltd.; SWANsat
Territory 6, Ltd.; SWANsat Territory 7, Ltd.; and SWANsat Territory 8, Ltd. This particular Limited Partnership is SWANsat
Territory 1, Ltd., and it is licensed to sell Subscriber Accounts in North America, including the United States, Canada,
Bermuda and Greenland. SWANsat 1, Inc. is the General Partner of SWANsat Territory 1, Ltd.
About the Geostationary Orbital Slots
LET has been granted assignment of six operational geosynchronous orbital (GSO) positions (illustrated in the table that
appears at the top of the following page), plus a seventh GSO for placement of a spare spacecraft. LET intends to place its
first SWANsat spacecraft into operation at orbital slot 100° West Longitude because TT&C for all members of the SWANsat
constellation will take place from 100° West Longitude through the first SWANsat spacecraft. SWANsat Marketing, LLC, the
SAT Licensor, intends to serve all countries located in SWANsat’s footprint at 100° West Longitude, should these countries
decide to allow access services provided by SWANsat. The downlink beam pattern generated by SWANsat is fully circular—
it covers the entire hemisphere from any geosynchronous orbital positions into which the SWANsat spacecraft may be placed.
Subsequent launches intends to deliver the remaining SWANsat constellation first to 30° East Longitude, then to 150° East
Longitude, then to its remaining GSO assignments. LET proposes to store its spare fourth SWANsat spacecraft in a
geosynchronous sparing orbit nominally ±0.2° of its 100° West Longitude assignment.
POTENTIAL CONFLICTS OF INTEREST
The General Partner and its principals and Affiliates may act as general partners to other limited partnerships and as principals
in other entities. Thus, the General Partner and its principals and Affiliates may be required to devote a portion of their time
and resources to the management of other projects or entities. The General Partner and its principals and Affiliates believe
they are capable of discharging their responsibilities to the Partnership and to any other entities in which they are, or may
become involved. The General Partner will devote only as much time to the management of the Partnership as, in its
judgment, is reasonably required. Conflicts may arise in allocating management time, services, and functions between the
Partnership and other entities.
The General Partner will use its best efforts to assist the Partnership to market and exploit the Subscriber Accounts, which
may involve principals and Affiliates of the General Partner, including other partnerships or corporations in which the General
Partner or its principals or Affiliates may own substantial interests. The Partnership will not have independent management,
and will rely on the General Partner for the operation of the Partnership business.
Page 21
Additional potential conflicts of interest include the following:
The General Partner of the Partnership (SWANsat 1, Inc.) is owned primarily by SWANsat Marketing, LLC, which in turn is
owned by private charitable trusts owned or controlled by Charles Welty and by private charitable trusts owned or controlled
by William Welty and Dr. Charles Missler, co-principals of Leading Edge Technologies, Ltd, (“LET”) the company licensed
by the Host Country to design, construct, launch and operate the SWANsat System. As one of the primary owners of the
General Partner, Charles Welty has the exclusive authority to set the advertising budgets, including compensation to all of the
management personnel associated with the Partnership. The budgets includes compensation to Charles Welty and LET, which
include William Welty. Said compensation was not set at arm’s length.
Subject to the demands of the banks and/or other financial institutions, or to the demands of the Host Country, the final budget
for the design, construction and launch of the SWANsat System may be more than the Maximum amount authorized to be
raised by this Private Placement Memorandum ($1,000,000,000). In the event the budget exceeds the Maximum amount
authorized by this Private Placement Memorandum, the General Partner may seek additional funding, in which event the
Limited Partners’ Units may be subject to dilution.
The Partnership intends to hold Mr. Charles Welty, and any and all other owners or managers of the General Partner harmless
from any conflict of interest arising out of any involvement with the General Partner to the Partnership and to SWANsat
Marketing, LLC and/or LET. The determination to enter into the hold harmless agreement was not made at arms length.
FIDUCIARY RESPONSIBILITY OF THE GENERAL PARTNER
Pursuant to the Partnership Agreement, the General Partner and its officers and employees are not required to devote their
full-time efforts to the business of the Partnership. Nevertheless, the General Partner is required to devote to the business of
the Partnership such time as the General Partner, in its sole discretion, shall deem necessary to manage and supervise the
Partnership business and affairs in an efficient and productive manner. The General Partner, in that capacity, is accountable as
a fiduciary in the conduct of certain aspects of the business of the Partnership and in dealings with the Limited Partners and,
Geosynchronous orbital slots for SWANsat™. TOP LEFT: Euro-African theater at 30° East Longitude. TOP CENTER: Asian
theater at 90° East Longitude. TOP RIGHT: Western Pacific theater at 150° East Longitude. BOTTOM LEFT: Central Pacific
theater at 210° East Longitude. BOTTOM CENTER: Americas theater at 100° West Longitude. BOTTOM RIGHT: Atlantic
theater at 30° West Longitude.
Page 22
consequently must exercise good faith and integrity in handling such affairs, must make full disclosure of its dealings with the
Partnership, and must account to the Partnership for any benefit or profit derived by it from any transaction connected with the
Partnership without the consent of the Limited Partners.
Provision has been made in the Partnership Agreement for exculpation of the General Partner. The General Partner and its
principals and Affiliates will not be liable to the partnership or any of the Limited Partners, when acting in good faith in a
manner reasonably believed by them to be within the scope of authority granted to them by the Partnership Agreement and in
the best interests of the Partnership, for errors in judgment or other acts of omissions unless they are unauthorized or amount
to fraud, bad faith, gross negligence, a willful breach of fiduciary duty to the Partners, or a failure to comply in any material
respect with the Partnership Agreement.
The Partnership Agreement provides for indemnification of the General Partner and its principals and Affiliates by the
Partnership for liabilities they incur in dealing with third parties while performing services in behalf of the Partnership within
the scope of authority conferred on them by the Partnership Agreement unless the liability arises out of the General Partner’s
or its principals’ or Affiliates’ unauthorized acts, bad faith, gross negligence, a willful breach of fiduciary duty to the Partners,
or a failure to comply in any material respect with the Partnership Agreement.
IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, INDEMNIFICATION FOR
LIABILITIES ARISING UNDER THE ACT IS CONTRARY TO PUBLIC POLICY AND, THEREFORE, IS
UNENFORCEABLE.
Partnership transactions involving the making, distribution, negotiation and management of the Partnership business may
result in the realization by the General Partner and its principals and Affiliates of commissions, fees, compensation, and
income. The General Partner has absolute discretion with respect to such transactions. The agreements and arrangements
between the partnership and the General Partner and its principals and Affiliates (including those relating to compensation)
have not been negotiated at arm’s length. Conflicts of interest between the General Partner and its principals and Affiliates, on
the one hand, and the Partnership and/or the Limited Partners, on the other hand, may arise with respect to, among other
things, the timing of the marketing of the Subscriber Accounts or a sale or other disposition of the Partnership’s property.
Limited Partners may have a more limited right of action against the General Partner and its principals and Affiliates than they
would have if the Partnership Agreement did not provide for exculpation and indemnification. If a lawsuit is pursued, the cost
of litigation against the General Partner for enforcement of its fiduciary obligations may be prohibitively high, and any
judgment obtained may not be collectible since the General Partner is not bonded and any judgment exceeding its net worth
may not be collectible. This is a rapidly developing and changing area of law, and Limited Partners who believe that gross
negligence, misconduct, or a breach of fiduciary duty by the General Partner has occurred should consult with their own legal
counsel. The Partnership will not pay for any insurance covering liability of the General Partner or any other persons for any
act or omission for which indemnification is not permitted by the Partnership Agreement.
RISK FACTORS
INVESTMENT IN THE UNITS OFFERED HEREBY INVOLVES A SUBSTANTIAL RISK AND SHOULD BE
UNDERTAKEN ONLY BY PERSONS WHOSE FINANCIAL RESOURCES ARE SUFFICIENT TO ENABLE
THEM TO BEAR THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT.
Risks Associated with the Partnership.
There are substantial risks associated with investing in the Partnership. The Risks are more fully set forth in the RISK
DISCLOSURE STATEMENT AND AGREEMENT. Each Purchaser is REQUIRED to execute the RISK DISCLOSURE
STATEMENT AND AGREEMENT. Some of the Risks include:
1.
No Operating History. The Partnership is a newly formed entity and has no history of operations in which an investor
could base an evaluation of an investment in the Partnership. In addition, the General Partner has no experience in
managing a telecommunications limited partnership. Although the personnel associated with the General Partner and
LET have extensive training in both management and the telecommunications industry, and have considerable
leadership experience, the General Partner as an entity has no operating history in the telecommunications industry.
2.
Liability of Limited Partners. By virtue of the laws of the State of California, the possession or exercise by the Limited
Partners of the rights specified in the Partnership Agreement will not result in the Limited Partners being deemed to be
taking part in the control of the Partnership’s business, assuming the Limited Partners do not exercise such rights in a
manner which effectively constitutes participation by them in the management or control of the Partnership’s business.
Page 23
3.
Retirement or Removal of General Partner. The General Partner may resign at any time after December 31, 2010;
provided, however, that 60 days prior to the resignation of the General Partner, the resigning General Partner shall
nominate one or more substitute general Partner(s) satisfactory to the Limited Partners holding at least 75% of the
Units, which would meet the requirements for continued qualification of the Partnership as a partnership for federal
income tax purposes. The Partnership will be dissolved upon the dissolution or legal disability, but not upon the
bankruptcy of the General Partner, unless a substitute general partner is appointed and the remaining Partner(s) elect to
continue the Partnerships’ business pursuant to a right to do so stated in the Partnership Agreement.
4.
Reliance on General Partner. A limited partner in a partnership does not have the same rights as a stockholder in a
corporation, nor does he or she have the same remedies, protections, or guaranties that stockholders have, since a
limited partner does not have a vote in determining policy. All decisions with respect to the management of the
Partnership will be made exclusively by the General Partner. The Limited Partners will have no right or power to take
part in the management of the Partnership. NO PERSON SHOULD PURCHASE ANY OF THE UNITS UNLESS
HE OR SHE IS WILLING TO ENTRUST ALL ASPECTS OF THE MANAGEMENT OF THE
PARTNERSHIP AND ITS BUSINESS TO THE GENERAL PARTNER. THERE IS A RISK THAT
RELIANCE UPON THE EXPERIENCE (OR LACK THEREOF) OF SUCH PERSONS MAY AFFECT THE
SUCCESS AND THE PROFITABILITY OF THE PARTNERSHIP.
5.
Limitations on the Liability of General Partner. Under the Partnership Agreement, the General Partner and its
Affiliates performing services on behalf of the Partnership are not liable to the Partnership or the Limited Partners for
any acts performed by them in good faith or for any non-action or failure to act, except for acts of negligence or
misconduct and, under certain circumstances, the General Partner and its principals and Affiliates will be entitled to
indemnification from the Partnership for any loss. Therefore, Limited Partners may have a more limited right of action
than they would have if the Partnership Agreement did not provide for exculpation or indemnification. See
“FIDUCIARY RESPONSIBILITY OF THE GENERAL PARTNER,” page 21. The Partnership Agreement provides
that any indemnification and any hold harmless of the General Partner shall be from, and limited to, Partnership assets.
It is possible, therefore, that the assets of the Partnership could be subjected to a judgment arising out of a successful
action against the General Partner.
6.
Conflicts of Interest. The General Partner and its Affiliates have business dealings apart from their dealings with
respect to the Partnership. They have established liabilities and obligations in connection with such business dealings
and transactions, some of which could interfere with or affect the performance of their obligations to the Partnership.
See “POTENTIAL CONFLICTS OF INTEREST,” page 20.
7.
Limited Transferability and Liquidity of Units. Units in a limited partnership are significantly less marketable than in
stock of a corporation whose shares are publicly traded or units in a limited partnership whose units are publicly
traded. There is no public market for the Units, and it is extremely unlikely that any public market will develop. Also,
there are restrictions on the transferability of the Units. Prospective investors should be aware that neither the General
Partner nor its principals or Affiliates are responsible for the resale of the Units although the consent of the General
Partner is required to transfer any Unit. Any transferee or assignee of a Unit must satisfy the suitability standards for
original investor and must own at least one Unit. Since the Units have not been registered under the Act or under any
applicable state securities laws, they may not be sold or transferred unless registration takes place or an applicable
exemption from registration is effective. Consequently, each Limited Partner should acquire Units only as a long-term
investment and should not rely in any way upon his investment in the Partnership to provide income or liquidity, or to
meet any need, emergency, or contingency, or otherwise.
8.
Registration Exemption. The Units are being offered and sold under one or more exemptions from registration
provided for in the Act and applicable state and federal securities laws, as amended, including certain rules
promulgated thereunder. Unless the sale of the Units qualifies for an exemption from registration, purchasers of the
Units will have the right to rescind their purchases if they so desire. Because compliance with available exemptions can
be difficult, it is possible that one or more of the purchasers of the Units seeking rescission of their purchase would
succeed. If a number of purchasers of the Units were to seek and obtain rescission of their purchases, the Partnership
Under certain circumstances, however, it is possible that the possession or exercise of these rights by Limited Partners
residing outside of California may be viewed in certain jurisdictions outside of California as taking part in the
management or control of the Partnership’s business. A determination by the IRS or a court of law that a Limited
Partner is participating in the management or control of the Partnership’s business could result in liability to such
Limited Partner substantially in excess of his capital investment.
Page 24
could face severe financial demands that would adversely affect the Partnership as a whole and, consequently, the nonrescinding investors as well.
9.
Uninsured Losses. LET will arrange for comprehensive insurance, including types of coverage typical for the design,
construction, launch and operation of satellites. There may be certain types of losses of a catastrophic nature, however,
which are either uninsurable or not economically insurable, including, but not limited to, war, Acts of God, or other
force majeure conditions. If any such catastrophe occurs, the Limited Partners could suffer a partial or total loss of
their investment.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS AND RISKS
THIS SECTION SHOULD BE CAREFULLY CONSIDERED BY EACH INVESTOR TO DETERMINE WHETHER
AN INVESTMENT IN THE PARTNERSHIP IS SUITABLE.
Introduction. There are significant federal income tax risks associated with the business of the Partnership and the purchase,
ownership and sale of Partnership Units. The Partnership has not requested and does not intend to request any ruling from the
Internal Revenue Service (the “Service”) with respect to any federal income tax consequences related to the Partnership, nor
will the Partnership seek an opinion of counsel regarding any federal or state tax consequences. In evaluating an investment in
the Partnership, a prospective investor should consider the tax consequences thereof, including, among other tax
consequences, possible tax treatment on the sale of the Units, and the assets of the Partnership, and on undistributed net
income of the Partnership, the possible disallowance of the deduction of certain items of expense, and recent and possible
future changes in the tax law. Each prospective investor is strongly urged to consult his own tax advisor with regard to all
federal (as well as state and local) tax consequences of an investment in the Partnership.
An investment in the partnership should not be viewed as a “tax shelter.” The Partnership has been formed to generate income
from the exploitation of the Subscriber Account(s), and is not expected to produce “tax losses” commonly associated with
“tax shelters.” The Partnership is not intended to be a tax shelter and will not register as a tax shelter. However, the Service
may attempt to classify the Partnership as a tax shelter. Such a classification could result in the Partners being liable for
penalties and other adverse consequences for the failure to register as a tax shelter.
All prospective investors should be aware of the following federal income tax risks which exist with respect to an investment
in the Partnership:
1.
Tax Status of the Partnership. The ability of a Limited Partner to include on his individual federal income tax returns his
share of the income, gain, loss, deduction and credit of the Partnership depends upon the Partnership being treated as a
partnership for federal income tax purposes rather than as an association taxable as a corporation. If the Partnership were
to be treated for federal income tax purposes as an association taxable as a corporation, the Partnership would be required
to pay taxes at applicable corporate rates (which rate is currently at a maximum of 34%) upon its income and gain. Losses
and deductions generated by the Partnership would be allowed only to the Partnership and would not be passed through
to the Limited Partners, and distributions to the Limited Partners would be taxable to them as dividends (at ordinary
income rates) to the extent of the earnings and profits of, and would not be deductible by, the Partnership. The
Partnership does not intend to apply for an advance ruling from the Service regarding the classification of the Partnership
as a partnership for federal income tax purposes.
2.
Possibility of Audit and Adjustment. There is significant uncertainty with respect to the tax treatment of a number of
Partnership tax Items, including but not limited to (i) assumptions regarding the projected income of the Subscriber
Accounts using the income forecast method of depreciation; and (ii) the character (capital or ordinary) of gain or loss
recognized upon the disposition of Partnership Property or Limited Partners’ Units. Thus, there is a significant risk that
information returns filed annually by the Partnership for federal income tax purposes will likely be audited by the
Service, and such audits may result in adjustment to the reported items of income, gain, loss, deduction or credit, or to the
allocation of such items among the Limited Partners of the Partnership. In the event of any adjustments, a Limited Partner
might incur attorneys’ fees, court costs, and other expenses in connection with contesting any proposed deficiency
asserted by the Service, as well as interest (compounded daily at a rate to be re-determined four times a year) on
underpayment and penalties if a deficiency is assessed. In addition, any adjustment to the information return of the
Partnership may result in an audit of each Limited Partner’s income tax return, which could result in adjustments on nonPartnership as well as Partnership tax items.
Page 25
Taxable Income in Excess of Cash Distributions. Since a Limited Partner is required to include in his gross income his
proportionate share of the Partnership’s taxable income, regardless of whether cash distributions are made, the portion of
a Limited Partner’s tax liability which is attributable to Partnership income in any year may exceed cash distributions to
him from the Partnership in that year. Certain expenditures payable out of the cash distributable to the Limited Partners
by the Partnership may not be deductible when paid and, consequently, taxable income in excess of distributions to
Limited Partners may result.
4.
Availability of Capital Gains on Sale of Unit. Under current law, gain on the sale or other disposition of an interest in a
partnership is generally treated as capital in nature, except to the extent otherwise provided by Code Section 751 with
respect to unrealized receivables and substantially appreciated inventory. The extent to which any gain on a Limited
Partner’s sale of his Units will be treated as capital or ordinary in nature depends on a number of factors, including future
fact, and no assurance can be given that the gain realized on any such sale would be taxed entirely as capital gain.
5.
Recapture of Depreciation. In the event of a sale, exchange or other disposition of the physical assets of the Partnership,
if any, the total amount of depreciation or amortization taken thereon must be recaptured as ordinary income to the extent
of any excess of the amount realized (or fair market value) over the adjusted basis of the assets. Similarly, a pro rata
portion of any gain realized by a Limited Partner on the sale, exchange or other disposition of his Partnership Unit to the
extent attributable to depreciation recapture respecting the assets, will be treated as ordinary income.
6.
Allocation of Income and Loss. Income (including gains) and loss of the Partnership are allocated In accordance with
the Limited Partnership Agreement. Allocations of income and loss pursuant to a partnership agreement may be deemed
“special allocation” and, therefore, must have “substantial economic effect” in order to be respected for federal income
tax purposes. Allocations of income and loss not having substantial economic effect may be reallocated to the Partners in
accordance with their interest in the Partnership, taking into account all the facts and circumstances. No assurance can be
given that the Service may not challenge the allocations of Income and loss to the Limited Partners and reallocate income
and lass to the Limited Partners in a manner different than as provided in the Limited Partnership Agreement. The
Limited Partnership Agreement permits the General Partner to modify from time to time, without the consent of the
Limited Partners, the allocations of the Partnership income and loss in order to achieve compliance with changes in
federal income tax laws. Such revised allocations would have an impact on the amounts of income and loss allocated to
the Limited Partners.
7.
At Risk Limitations. Code Section 465 provides that a Limited Partner that is an individual or closely held corporation
will not be allowed to currently deduct his share of the Partnership’s tax losses, if any, to the extent such Limited Partner
is deemed to be economically at risk as to the Partnership’s activities. Any tax losses that are not currently allowable
under the at risk limitations may be carried forward indefinitely to future taxable years to be used if and to the extent the
Limited Partner’s amount at risk increases (and may also be used to offset gain on the sale of his Unit in the Partnership).
A Limited Partner’s amount at risk initially will equal the sum of: (i) the amount of money initially invested by the
Limited Partner in the Partnership’s activities; (ii) The basis of any property contributed by him to such activities; and
(iii) the amount of borrowed funds used in such activities to the extent that the Limited partner is personally liable with
respect to such indebtedness.
8.
Passive Activity Loss Limitations. Code Section 469 prevents individuals and certain corporations from using tax losses
from a “passive activity” to offset income from unrelated sources. Under the passive activity loss limitation applied to
individuals and personal service corporations, tax losses from a passive activity that are allowable after application of the
at-risk limitations may be used to offset income from other passive activities and may not be used to offset either
“portfolio income” (defined generally as interest, dividends, royalties and gain derived from the disposition of property
held for investment, other than an interest in a passive activity) or active business income, including earned income. A
passive activity is defined generally as any investment in active business in which the taxpayer does not materially
participate (such as the Partnership). The Department of Treasury has recently issued extensive and complicated Treasury
Regulations under Code Section 469 which provides rules for determining what is an activity and what constitutes
material participation. Each Limited Partner should consult his own tax advisor as to the effect the passive activity loss
limitations will have on him of an investment in the Partnership.
9.
Alternative Minimum Tax. As a result of the lowering of the regular income tax rates, an expansion of the items taken
Into account in determining alternative minimum taxable income, and a vanishing exemption amount under the
alternative minimum tax provisions, it is possible that a number of Limited Partners will be subject to the alternative
minimum tax. Some deductions taken by the Partnership. may; be treated. by the Service as a tax preference item. Thus
each Limited Partner should consult his own tax advisor as to the effect on him of an investment in the Partnership.
3.
Page 26
10. Profit Motive. Generally, a taxpayer is not allowed to claim a loss, deduction, or tax credit to reduce his federal income
tax liability to the extent that the loss, deductions, or credits arose from an activity not engaged in for profit. Although
one of the objectives of the Partnership Is to provide the Limited Partners with cash distributions and/or capital
appreciation in excess of their original capital contributions, there can be no assurance that the Partnership will be
deemed by the Service to be engaged in an activity for a profit.
11. State and Local Taxes. An investment in the Partnership has state and local consequences which should be considered by
each Limited Partner in consultation with his own tax advisors.
THE FOREGOING IS A SUMMARY OF CERTAIN FEDERAL INCOME TAX RISKS RELATING TO AN
INVESTMENT IN THE PARTNERSHIP. THIS SUMMARY SHOULD NOT BE INTERPRETED AS A
REPRESENTATION THAT THE MATTERS REFERRED TO HEREIN ARE THE ONLY RISKS INVOLVED IN
THIS INVESTMENT OR THAT THE MAGNITUDE OF SUCH RISKS ARE NECESSARILY EQUAL.
SUMMARY OF PARTNERSHIP AGREEMENT
A prospective Limited Partner should read and familiarize himself with the Partnership Agreement, which is attached to this
Memorandum. The following statements summarize certain provisions of the Partnership Agreement which, for the most part,
are not otherwise covered herein but do not purport to be a complete description of the Partnership Agreement and are
qualified in their entirety by express reference to the Partnership Agreement.
General Partner
The General Partner of the Partnership is SWANsat 1, Inc., which will have all managerial and ministerial duties of the dayto-day operations of the Partnership.
Term of Partnership
The Partnership will commence upon the execution of the Partnership Agreement and the recordation of an appropriate
Certificate of Limited Partnership with the California Secretary of State and will continue until December 31, 2030 (on which
date the Partnership shall be dissolved and wound up), unless earlier terminated in accordance with the terms of the
Partnership Agreement or by law. Investors may sell their interests to the General Partner or its assigns at any time.
Dilution of Interest of a Limited Partner
In the event that the Limited partnership Agreement is amended to increase the amount of the maximum offering, then each
Partner's capital account shall be diluted in direct proportion to the amount that such additional offering bears to the maximum
offering set forth in this Limited Partnership Agreement.
Pre-Sale Financing and Reduction of Minimum Offering
The General Partner may reduce the amount of the minimum offering required in the Limited Partnership Agreement through
the use of pre-sales of Subscriber Accounts, provided SWANsat Marketing, LLC , the SAT Licensor, assents to such a sale of
rights and the price obtained for such rights is determined by the General Partner to be fair and reasonable.
Liabilities of Partners
Pursuant to California law, the liability of each Limited Partner, unless he is deemed to be taking part in the control of the
Partnership’s business, is limited to the amount of his investment (including limited assessments for unanticipated
governmental taxes and assessments against the Subscriber Accounts) in the Partnership, whether or not returned to him,
together with an undistributed share of the profits of the Partnership from time to time credited to such Limited Partner’s
capital account and any money or other property wrongfully paid or conveyed to him or his account, including, but not limited
to, money or property to which creditors were legally entitled which has been paid or conveyed to a Limited Partner (and,
under certain circumstances, interest on such amounts). The General Partner is liable for recourse obligations of the
Partnership. Except as set forth above, Limited Partners will have no personal liability to third parties, to the Partnership, or to
other Partners.
Page 27
Except with respect to certain major decisions concerning the Partnership and the Partnership’s business, the General Partner
shall have full, exclusive, and complete discretion in the management and control of the business of the Partnership. As part of
its duties, the General Partner must pay out of available funds and other assets of the Partnership all expenses and obligations
of the Partnership when due, including salaries, Partnership indebtedness, taxes, insurance premiums, and other appropriate
Partnership expenses. The General Partner, on behalf of the Partnership, will be obligated, or otherwise have the power, to file
or record the Certificate of Limited Partnership of the Partnership and amendments thereto in the State of California and in all
other jurisdictions where the business of the Partnership may be conducted and such filing is required; to enter into and
execute such agreements or other documents on such terms and conditions as it deems necessary or desirable in order to carry
out the Partnership’s business, including all agreements relating to the promotion and (subject to certain limitations discussed
below) any future sales or the Subscriber Accounts; to maintain the Partnership’s books and records; to appoint the
Partnership’s accountants, attorneys, employees and their representatives (who may be principals or Affiliates of the General
Partner); to make distributions to the Partners in accordance with the Partnership Agreement; and to enforce the Partnership’s
remedies against third parties as the General Partner may deem appropriate. In so acting on behalf of the Partnership, the
General Partner is accountable to the Partnership as a fiduciary and is required to exercise good faith and integrity.
Withdrawal from Partnership
Prior to the dissolution and liquidation of the Partnership, no Limited Partner will be entitled to terminate all or any part of his
interest in the Partnership or to withdraw any part of his contribution to capital or otherwise withdraw funds from the
Partnership except as otherwise provided in the Partnership Agreement. No Limited Partner has any priority over any nondefaulting Limited Partners as to the return of his contribution to capital or to any distributions. Distributions and other
payments to a Limited Partner who has defaulted on payment or additional assessment may be suspended by the Partnership.
No Limited Partner has any right to demand property other than cash in return for his capital contribution.
Profits, Losses, and Time of Distributions
The portion, if any, of the Partnership’s funds, after the payment of expenses and such reserves as the General Partner deems
appropriate for the fixed and contingent obligations of the Partnership, will be distributed from time to time as the General
Partner, in its sole discretion, deems proper.
Distribution of Gross Receipts
The Partnership’s Gross Receipts, if any, will be distributed and allocated in the following order of priority:
1.
The General Partner shall receive compensation of $5,000 per week retroactive to the Offer Date as an expense to
the Partnership.
2.
Pay the operating expenses of the Partnership, including amortized costs for the design, construction, insurance,
launch, and replacement costs of the satellites and the Satellite Network Operation Center(s) (SNOCs), and any
deferred payments to management.
3.
Pay for the Partnership’s on-going pro rata share of the promotion and advertising of the SWANsat System,
including a fee of 5% of gross billings for the funding of independently produced family-oriented theatrical motion
pictures which will be distributed through the SWANsat System to Subscribers as part of the entertainment service
distributed by SWANsat.
4.
Pay for the establishment of a reasonable reserve, as may be set aside by the General Partner in its discretion from
time to time for the anticipated expenses of the Partnership, the remainder of which reserve will be distributed upon
the liquidation of the Partnership.
5.
Repay any Preferred Capital Contributions until the Preferred Capital Contributors have recouped an amount equal
to 110% of their Preferred Capital Contributions.
6.
7.
Further Gross Receipts, if any after all of the above allocations, shall be characterized as Profits and will be paid
20% to the Limited Partners in the same proportions as their Capital Contributions bear to the aggregate Capital
Management of Partnership Business
Page 28
Contributions of $1,000,000,000 from all Limited Partners (including in the sum of said aggregate Capital
Contributions), and 80% to the General Partner.
Distribution upon Dissolution. Amounts available for distribution upon dissolution of the Partnership (net of amounts due
creditors, including Partners of the Partnership) shall be distributed in the same order of priority as Gross Receipts.
Distribution Upon Withdrawal. Except as otherwise provided in this Agreement, no Partner shall be entitled to receive his
Capital Contribution, any distribution, or the fair value of such Partner’s Unit as the result of such Partner’s withdrawal from
the Partnership.
Taxable Income and Taxable Losses. As used in this Agreement, the terms “Taxable Income” and “Taxable Losses” shall
mean, respectively, with respect to any fiscal period, the net income or net losses of the Partnership for such period, as
determined for federal Income tax purposes, Including, as appropriate, each Item of income, gain, loss, or deduction entering
into such determination, and in accordance with the accrual method of accounting on a calendar year basis.
Taxable Income and Taxable Losses for any fiscal period of the Partnership shall be allocated, after consultation with the
Partnership’s accountants, as follows:
(a) Taxable Income for any fiscal period of the Partnership shall be allocated in the same order of priority as Gross
Receipts.
(b) Taxable Losses suffered and incurred by the Partnership, in an amount up to but not exceeding the aggregate of all
Capital Contributions, shall be allocated 99% to the Limited Partners, which amount shall be allocated to each
Limited Partner in the same proportion as his Capital Contribution bears to the aggregate Capital Contributions of all
Limited Partners, and 1% to the General Partner. Thereafter, to the extent of any Taxable Income, the General
Partner and Limited Partners shall share Taxable Losses pro rata in the same proportions as they are entitled to share
Profits; provided, that any Taxable Losses suffered and incurred in excess of previously allocated Taxable Income
shall be allocated 100% to the General Partner.
Allocation in the Event of Transfer
Upon the Transfer of a Unit (other than by bequest or pledge), there shall be allocated to each Person who held the
Partnership Unit during such a year a sum, which is a fraction (the numerator of which shall be the number of days such
Person held the Unit during such year and the denominator of which shall be the total number of days in such year) of the
amount such Unit is entitled to receive as a distribution. Such allocation shall be made without regard to the date, amount, or
recipient of any distribution which may have been made with respect to such Unit.
Limited Transferability of Units
The transfer of Units is restricted. The General Partner has a right of first refusal to purchase any Limited Partner’s Unit(s) to
be transferred. Any transferee or assignee of a Unit must satisfy the suitability standards applicable to the transferor or
assignor (see “One (1) executed copy of the AGREEMENT OF LIMITED PARTNERSHIP, which contains certain
representations and a power of attorney.
6.
One (1) completed and executed copy of the Investor Representation Letter.
7.
One (1) completed and executed copy of the RISK DISCLOSURE STATEMENT AND AGREEMENT.
8.
One (1) executed COUNTERPART SIGNATURE PAGE for the Agreement of Limited Partnership.
9.
A CERTIFIED CHECK or MONEY ORDER made payable in United States dollars (USD) to “SWANsat Territory
1, Ltd.” in an amount equal to the price of the Units desired.
SUITABILITY STANDARDS,” page 12). Except in the case of a fractional Unit originally issued upon subscription, at no
time may a Limited Partner or assignee own less than one Unit, nor may any assignor retain any Unit unless he retains one or
more Unit(s). It will be the policy of the Partnership that the transfer of Units will be recognized only upon prior approval of
the General Partner and upon the completion by the transferor and transferee of a written assignment in a form satisfactory to
the General Partner. Notwithstanding the foregoing, any Limited Partner may transfer Units to a personal or family trust
and/or any beneficiary of said personal or family trust, to a charitable remainder unitrust and/or any beneficiary of said
Page 29
Additionally, a Limited Partner represents and warrants to the General Partner and to the Partnership that he will not sell or
distribute a Unit or any portion thereof unless, in the opinion of counsel (which opinion shall be satisfactory to counsel for the
Partnership), such Unit or portion of a Unit may be legally sold or distributed under the Act and applicable state securities
laws.
The assignee of a Unit does not become a Limited Partner by virtue of such assignment and has no rights by virtue of such
assignment other than the right through his assignor to receive distribution of cash or other property from the Partnership after
the effective date of the assignment. The Partnership Agreement provides that an assignee of Units may become a substitute
Limited Partner only upon meeting certain conditions, including (i) filing with the Partnership a properly executed and
acknowledged document of assignment in a form approved by the General Partner; (ii) payment of a reasonable substitution
fee sufficient to cover the filing fees and legal expenses incurred in connection therewith; (iii) execution of an irrevocable
power of attorney similar to that contained in the Subscription Agreement included herein; and (iv) receipt of the written
discretionary consent of the General Partner to the substitution. Further, any assignee must meet the suitability standards set
forth elsewhere in this Memorandum. The General Partner has the right, in the exercise of its absolute discretion, to refuse to
consent to any such substitution.
Accounting, Records, and Reports
The Partnership will adopt a calendar year for tax purposes and will be operated on the cash basis of accounting. Within go
days after the close of the Partnership’s taxable year, each Limited Partner will be furnished with all tax information with
respect to the Partnership which may be necessary for the Limited Partner’s individual tax return. All out-of-pocket costs and
expenses associated with the preparation of Partnership financial statements, reports, and information will be borne by the
Partnership. All books and records for the Partnership shall be kept at the Partnership’s principal place of business and shall
be open to inspection by any Partner, during business hours upon reasonable notice to the General Partner.
Amendment of Partnership Agreement
All amendments to the Partnership Agreement materially and adversely affecting rights and obligations of the Limited
Partners as set forth in the Partnership Agreement must be approved by the Limited Partners owning at least 75% of the Units
and by the General Partner. Any amendment which specifically increases the obligation of the Limited Partners to make
Capital Contributions requires the approval of the Limited Partners owning at least 75% of the Units.
Limited Partners’ Voting Rights
Except as otherwise set forth in the Partnership Agreement, the Limited Partners have the right, subject to the terms of the
Partnership Agreement, to approve the following matters:
1.
material amendments to the Partnership Agreement as set forth above;
2.
termination of Partnership business;
3.
elections of a trustee to liquidate or distribute the Partnership assets upon a dissolution caused by the resignation,
removal, legal disability, dissolution, or bankruptcy of the General Partner; and
4.
reestablishment of the Partnership upon an event of withdrawal of the General Partner as set forth in the Partnership
Agreement.
Each of the above named matters shall require the approval of Limited Partners owning at least 75% of the Units.
charitable remainder unitrust, or to other similar estate planning entity or entities created by and/or administered by said
Limited Partner provided any such transfer does not materially affect the General Partner’s rights hereunder or the rights of
the General Partner to manage the affairs of the Partnership. Any such transfer shall not be deemed to be a transfer subject to
the General Partner’s right of first refusal and may be made without the consent of the General Partner. The transferring
Limited Partner, however, must provide to the General Partner a legal opinion letter at the expense of the Limited Partner
requesting the transfer indicating that i) the recipient of such transfer is indeed a valid family or personal trust, charitable
remainder unitrust, or other similar estate planning entity, ii) that the proposed beneficiaries of said trust, charitable remainder
unitrust or other similar estate planning entity is indeed a beneficiary according to said trust, charitable remainder unitrust or
other similar estate planning entity; and iii) the transfer of any Unit or Units held by the Limited Partner meets the transfer
requirements set forth herein.
Page 30
Partners’ Independent Activities
The Partnership Agreement permits the General Partner (and its agents, employees, officers, directors, shareholders, partners,
and Affiliates) and each Limited Partner to engage in whatever activities they choose, whether such activities are competitive
with the Partnership or otherwise, without having or incurring any obligation to offer any interest in such activities to the
Partnership or to any party to the Partnership Agreement. The Partnership Agreement also permits the Partners (and their
agents, employees, officers, directors, shareholders, partners, and Affiliates) to have a pecuniary interest in any investment to
be acquired or disposed of by the Partnership or in any transaction to which the Partnership is a party or has an interest.
Nevertheless, the General Partner recognizes and is bound by its fiduciary responsibility to the Partnership. See
“FIDUCIARY RESPONSIBILITY OF THE GENERAL PARTNER,” page 21.
Meetings of the Partnership
It is not contemplated that there will be regular meetings of the Partnership. Nevertheless, meetings of the Partnership may be
called at any time by the General Partner and shall be called by the General Partner upon the written request of Limited
Partners owning more than 75% of the Units.
Resignation and Removal of the General Partner
The General Partner may resign at any time after December 31, 2010; provided, however, that 60 days prior to the effective
date of the resignation of the General Partner, the General Partner shall nominate one or more substitute general partner(s),
satisfactory to the Limited Partners holding at least 75% of the Units. In addition, subject to certain material limitations
provided in the Partnership Agreement, a General Partner at any time and for any reason, may be removed as a general partner
of the Partnership upon the vote of Limited Partners owning at least 75% of the Units. Upon its removal or resignation, the
General Partner will be compensated for its interest in the Partnership as set forth in the Partnership Agreement. If the General
Partner is removed for fraud, gross negligence, or willful misconduct, it shall relinquish its entire interest in the Partnership
without compensation therefor.
Dissolution of the Partnership
The Partnership may be dissolved: (i) at the discretion of the General Partner; (ii) upon the sale or other disposition of
substantially all the Partnership assets and distribution of all proceeds therefrom; (iii) upon the retirement (including
resignation or removal), dissolution, or bankruptcy of the General Partner; (iv) by order of a court of competent jurisdiction or
any recognized process; or (v) on December 31, 2030. In the case of the retirement, death, dissolution, legal disability, or
bankruptcy of the General Partner, any duly appointed General Partner may continue the Partnership pursuant to the
Partnership Agreement.
THE GENERAL PARTNER
SWANsat 1, Inc., is a Wyoming Limited Liability Corporation. The company maintains a mailing address in Fullerton,
California, but its primary activities occur in the state of Nevada. The principal partners in SWANsat 1, Inc. is SWANSAT
Holdings, LLC, which in turn is owned by charitable trusts owned and/or controlled by Charles Welty and William Welty.
THE GENERAL PARTNER RESERVES THE RIGHT TO SUBSTITUTE AN OFF-SHORE BUSINESS ENTITY
(I.E., A CORPORATION NOT DOMICILED WITHIN THE UNITED STATES OF AMERICA) AS GENERAL
PARTNER WITHOUT THE FURTHER APPROVAL OF THE LIMITED PARTNERS, PROVIDED THE
OWNERSHIP INTERESTS IN THE NEW GENERAL PARTNER ARE NOT AT VARIANCE, TO ANY
SUBSTANTIAL DEGREE, TO THE INTERESTS OF THE CURRENT GENERAL PARTNER.
The General Partner’s strength lies in its contract with SWANsat Holdings, LLC through LET to sub-license the Subscriber
Area Territories, and in its ability to evaluate business opportunities and prudently supervise the company’s business affairs so
the Partnership maximizes profits. The General Partner’s development and marketing decisions flow from a simple axiom:
return investment moneys as quickly as possible.
THE GENERAL PARTNER’S PRINCIPAL
William Welty serves as Chairman of SWANsat Holdings, and Chairman and CEO of Leading Edge Technologies, LLC, the
parent company of the SWANsat project. He serves as Executive Director of the ISV Foundation, a non-profit educational
and charitable foundation. He co-founded Continental Satellite Corporation, and began the second round of filings for the
Page 31
Charles Welty serves as CEO of SWANsat Marketing, LLC, the marketing arm of SWANsat Holdings. He began his career
writing scripts for the radio, television and motion picture industries. He started writing in radio in 1976. After completing an
award-winning radio documentary (The Spirit in ’76), he went on to produce a series of public service announcements (radio
and television) for the Faith America Foundation. Mr. Welty was later retained to write the screenplay for Minnesota
Connection, based on the popular Warner paperback. (The picture starred Joseph Campanella and Rosie Greer.) Charles
Welty joined the Writers Guild of America in 1981. Mr. Welty went on to write and co-produce the pilot for a television
series, Build it, America!, which was produced by CCR Video in Hollywood, a publicly-traded company. In 1984, he wrote a
full-length treatment for a motion picture fantasy adventure called Altarion’s Hero. In 1998, Mr. Welty began to develop
Venture Theater, a 45-minute stage play on entrepreneurship for young people. He has written nine theatrical scripts, all of
which have been optioned for production and are expected to be distributed on the SWANsat System as promotional
incentives to new Subscribers.
The background of the owners, trustees, and/or managers of Leading Edge Technologies, LLC, the Master Licensor from the
Host Country of the permit to design, construct, launch, and operate the SWANsat System, is set forth in the Marketing Plan
and Information Memorandum, which is included as an Appendix to this Memorandum.
LEGAL AND ACCOUNTING REPRESENTATION
The Partnership is expected to be represented by the San Diego law firm of Weintraub-Dillon and by the Beverly Hills
accounting firm of Landsman, Frank and Bloch. Landsman, Frank and Bloch has been the accountancy firm of record to LET
and its founder William Welty since 1997 and was hired by the Partnership at the recommendation of Mr. William Welty.
MARKETING PLAN REVIEW
The Marketing Plan and Information Memorandum which more fully describes the SWANsat System and Leading Edge
Technologies, LLC is available for review from the General Partner upon written request. A non-disclosure document may be
required by the General Partner for review of the document.
DATES FOR CONSTRUCTION, LAUNCH, AND PLACEMENT INTO SERVICE
Construction of the SWANsat System will take about four and a half years following start of construction for delivery of the
first SWANsat spacecraft to geosynchronous orbit at 100° West Longitude. Follow-on launches of subsequent operational
spacecraft will occur in approximately 12 months intervals thereafter. LET estimates that each operational SWANsat
spacecraft will be placed into service about 90 days after its launch, following completion of on-orbit testing and certification.
The Partnership expects to exceed the minimum guidelines set forth below.
In the table delineated below, SWANsat-I (F1 Build) will be placed in operation at a cost of US$1.5 billion paid over the first
four years of the program. As noted in this table, the approximate cash flow requirements to build the entire SWANsat System
are about $1.5 billion for the first year, $1.3 billion for years two and three, $1.2 billion for year four, and about $0.7 billion at
the start of year five. This money is expected to come from bank loans or other financing. The General Partner reserves the
right to raise additional capital through sale of Partnership Units, up to the maximum amount of the Offering, including the
costs of 1,000,000 SWANsat handsets, which are to be included in the price of the SWANsat service.
MILESTONE ITEM
ESTIMATED DATE
PROGRAM START
DECEMBER 2004
COMMENCEMENT OF SERVICES VIA SWANSAT-AMERICAS
SUMMER 2009*
COMMENCEMENT OF SERVICES VIA SWANSAT-EURO
SUMMER 2010*
COMMENCEMENT OF SERVICES VIA SWANSAT-PACIFIC
SUMMER 2011*
DELIVERY OF SWANSAT SPARE
SUMMER 2012**
DELIVERY OF SWANSAT-4
SUMMER 2013*
SUMMER 2014*
SUMMER 2015*
Direct Broadcast Satellite industry, successfully selling the company’s permits for over $15 million in cash, and retained a
quarter of a billion dollars in broadcast rights for the benefit of a number of charitable entities.
Page 32
MILESTONE ITEM
ESTIMATED DATE
*THIS SCHEDULE ASSUMES 54-MONTH DELIVERY SCHEDULE FOR FIRST SPACECRAFT DELIVERY, WITH FOLLOW-ON
DELIVERIES EVERY 12 MONTHS.
**THE LICENSEE MAY, AT ITS OPTION, ELECT TO DELAY DELIVERY OF THE SWANSAT SPARE UNTIL AFTER DELIVERY TO
ORBIT OF SWANSAT 6 OCCURS.
ESTIMATED OPERATING EXPENSES
Operating costs for SWANsat TT&C will not exceed US$120 million per year. A one-time flight performance fee is payable
to the SAT Licensor’s vendor upon final acceptance of each spacecraft as delivered to orbit in the approximate amount of $20
million. An orbital performance fee of US$3.65 million is also payable annually to the vendor for each SWANsat spacecraft
An additional expense allocation of US$500 million per year will be assigned to depreciation costs. The SAT Licensor will
establish a sinking fund from operational surpluses so that replacement spacecraft can be launched about twenty years after
placement into service of each SWANsat spacecraft. Replacement of the entire SWANsat constellation at the end of the
spacecraft service lives will cost about US$4 billion.
ESTIMATED CASH FLOW
CUSTOMER ACQUISITIONS
NUMBER
DEPLOYMENT OF SWANSAT-AMERICAS
END OF FIRST YEAR
END OF SECOND YEAR
DEPLOYMENT OF SWANSAT-EURO
END OF THIRD YEAR
END OF FOURTH YEAR
DEPLOYMENT OF SWANSAT-PACIFIC
END OF FIFTH YEAR
END OF SIXTH YEAR
DEPLOYMENT OF SWANSAT SPARE
100,000*
1,000,000†
2,000,000
3,000,000
5,000,000
7,000,000
9,000,000
10,000,000
11,000,000
12,000,000‡
REVENUE
N/A*
$1,000,000,000
$2,000,000,000
$3,000,000,000
$5,000,000,000
$7,000,000,000
$9,000,000,000
$10,000,000,000
$11,000,000,000
$12,000,000,000
TOTALS
N/A*
$1,000,000,000
$3,000,000,000
$6,000,000,000
$11,000,000,000
$18,000,000,000
$27,000,000,000
$37,000,000,000
$48,000,000,000
$60,000,000,000
*THE SAT LICENSOR HAS ASSIGNED 100,000 NON-REVENUE SWANSAT ACCOUNTS TO THE HOST COUNTRY IN EXCHANGE FOR
NON-REVENUE ASSIGNMENT OF ORBITAL ALLOCATIONS AND FREQUENCIES. ACCORDINGLY, REVENUE FROM THE FIRST 100,000
ACCOUNTS WILL NOT ACTUALLY ACCRUE TO THE SAT LICENSOR.
†A THREE YEAR SERVICE COMMITMENT WILL BE REQUIRED IN ORDER FOR THE CUSTOMER TO RECEIVE A FREE SWANSAT
HANDSET. THE RETAIL PRICE OF THE HANDSET WILL PROBABLY BE ABOUT $1,200 WITHOUT SERVICE ACTIVATION.
‡CURRENT AS OF THE DATE OF THIS DOCUMENT, ESTIMATED CUSTOMER CAPACITY FOR THE SWANSAT SYSTEM IS 12 MILLION
USERS. A LL SWANSAT LIMITED PARTNERSHIPS WILL CONTROL A MAXIMUM OF 10,000,000 SUBSCRIBER ACCOUNTS. ANY AND
ALL REMAINING SUBSCRIBER ACCOUNTS WILL BE OWNED AND/OR CONTROLLED BY LET.
ESTIMATED RETURN ON INVESTMENT
THE GENERAL PARTNER CANNOT PREDICT WITH ANY DEGREE OF CERTAINLY A “RETURN ON
INVESTMENT” IN THE PARTNERSHIP. A spreadsheet illustrating an estimated Return on Investment (ROI) in the
Partnership is included below. The numbers are ESTIMATES ONLY and represent the General Partner’s BEST GUESS as
to the possible return on investment in the Partnership.
THE SPREADSHEET ON THE FOLLOWING PAGE CONTAINS FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE “ACT”).
IN PARTICULAR, WHEN USED IN THE SPREADSHEET, ALL FINANCIAL FIGURES REPRESENT CONDITIONAL EXPRESSIONS THAT ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF THE ACT AND ARE SUBJECT TO THE SAFE HARBOR CREATED BY THE
ACT. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, AND ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING
STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, MARKET
Page 33
CASH FLOW AND ROI (BEST GUESS)
Investments
2004
Offering Round 1
Offering Round 2
$2,000,000
$0
Income
2009
Subscriber Accounts
Expenses
SWANsat Fees
Construction Loans
Advertising and Promotion
Management Incentives
$600,000,000
2009
$8,000,000
$140,000,000
$50,000,000
$2,000,000
$192,000,000
Profit and ROI
2009
Gross Profit
Offering Round 1
Offering Round 2
$8,000,000
$2,000,000
$6,000,000
2005
$250,000,000
2010
$600,000,000
2010
$16,000,000
$280,000,000
$100,000,000
$4,000,000
$384,000,000
2010
2006
$250,000,000
2007
$250,000,000
2011
$600,000,000
2012
$600,000,000
2011
$24,000,000
$420,000,000
$150,000,000
$6,000,000
$576,000,000
2012
$592,000,000
$0
$200,000,000
$8,000,000
$208,000,000
2011
2012
2008
$250,000,000
2013
$600,000,000
2013
$740,000,000
$0
$250,000,000
$10,000,000
$260,000,000
2013
$16,000,000
$4,000,000
$12,000,000
$24,000,000
$6,000,000
$18,000,000
$592,000,000
$148,000,000
$444,000,000
$740,000,000
$185,000,000
$555,000,000
400,000
600,000
800,000
1,000,000
Assumptions
Subscriber Fee/Yr
Accounts/Year
SWANsat License Fees
Advertising and Promotion
Management Incentives
$1,000
200,000
7%
25%
1%
33%
of Sales
of Sales
of Sales
of Sales
The numbers are ESTIMATES ONLY and represent the General Partner’s BEST GUESS as to the possible return on
investment in the Partnership.
SUBSCRIBER AREA TERRITORIES
Country Allocations (with Top Level Domains (TLDs)
SAT
Map Coordinates
Country
TLD
#
Longitude Latitude
1 North America
United States
.us 38 00 N
97 00 W
Canada
.ca 60 00 N
95 00 W
Bermuda
.bm 32 20 N
64 45 W
Greenland
.gl 72 00 N
40 00 W
Saint Pierre and Miquelon .pm 46 50 N
56 20 W
Total Population Estimates
2 Central & South America, Caribbean
Brazil
.br 10 00 S
55 00 W
Mexico
.mx 23 00 N 102 00 W
Colombia
.co
4 00 N
72 00 W
Argentina
.ar 34 00 S
64 00 W
Pop in 2003
Est Pop in 2008
290,342,554
32,207,113
64,482
56,385
6,976
322,677,510
303,824,646
33,679,263
66,536
56,326
7,044
337,633,815
182,032,604
103,718,062
41,662,073
38,740,807
191,908,598
109,955,400
44,858,264
40,677,348
CONDITIONS, COMPETITIVE FACTORS, THE ABILITY TO SUCCESSFULLY COMPLETE ADDITIONAL
FINANCING, AND OTHER RISKS. THIS BUDGET IS SUBJECT TO REVISIONS UPWARD OR DOWNWARD,
DEPENDING ON THE AVAILABILITY AND AMOUNT OF FINANCING RAISED BY THE GENERAL
PARTNER.
Page 34
SAT
#
Country
TLD
Peru
.pe
Venezuela
.ve
Chile
.cl
Guatemala
.gt
Ecuador
.ec
Cuba
.cu
Hungary
.hu
Dominican Republic
.do
Bolivia
.bo
Haiti
.ht
Honduras
.hn
El Salvador
.sv
Paraguay
.py
Nicaragua
.ni
Puerto Rico
.pr
Costa Rica
.cr
Uruguay
.uy
Panama
.pa
Jamaica
.jm
Trinidad and Tobago
.tt
Guyana
.gy
Guadeloupe
.gp
Suriname
.sr
Martinique
.mq
Bahamas
.bs
Barbados
.bb
Belize
.bz
.an
French Guiana
.gf
Saint Lucia
.lc
Saint Vincent & Grenadines .vc
Virgin Islands
.vi
Grenada
.gd
Aruba
.aw
Dominica
.dm
Antigua and Barbuda
.ag
Cayman Islands
.ky
.kn
British Virgin Islands
.vg
Turks and Caicos Islands .tc
Anguilla
.ai
Montserrat
.ms
Saint Helena
.sh
3 UK & Europe
Germany
.de
France
.fr
United Kingdom
.uk
Italy
.it
Ukraine
.ua
Spain
.es
Poland
.pn
Romania
.ro
Netherlands
.nl
Serbia and Montenegro
.yu
Greece
.gr
Belarus
.b
Belgium
.be
Czech Republic
.cz
Portugal
.pl
Sweden
.se
Map Coordinates
Longitude Latitude
10 00 S
76 00 W
8 00 N
66 00 W
30 00 S
71 00 W
15 30 N
90 15 W
2 00 S
77 30 W
21 30 N
80 00 W
47 00 N
20 00 E
19 00 N
70 40 W
17 00 S
65 00 W
19 00 N
72 25 W
15 00 N
86 30 W
13 50 N
88 55 W
23 00 S
58 00 W
13 00 N
85 00 W
18 15 N
66 30 W
10 00 N
84 00 W
33 00 S
56 00 W
9 00 N
80 00 W
18 15 N
77 30 W
11 00 N
61 00 W
5 00 N
59 00 W
16 15 N
61 35 W
4 00 N
56 00 W
14 40 N
61 00 W
24 15 N
76 00 W
13 10 N
59 32 W
17 15 N
88 45 W
12 15 N
68 45 W
4 00 N
53 00 W
13 53 N
60 68 W
13 15 N
61 12 W
18 20 N
64 50 W
12 07 N
61 40 W
12 30 N
69 58 W
15 25 N
61 20 W
17 03 N
61 48 W
19 30 N
80 30 W
17 20 N
62 45 W
18 30 N
64 30 W
21 45 N
71 35 W
18 15 N
63 10 W
16 45 N
62 12 W
15 56 S
5 42 W
51
46
54
42
49
40
52
46
52
44
39
53
50
49
39
62
00
00
00
50
00
00
00
00
30
00
00
00
50
45
30
00
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
9
2
2
12
32
4
20
25
5
21
22
28
4
15
8
15
00
00
00
50
00
00
00
00
45
00
00
00
00
30
00
00
E
E
W
E
E
W
E
E
E
E
E
E
E
E
W
E
Pop in 2003
Est Pop in 2008
28,409,897
24,654,694
15,665,216
13,909,384
13,710,234
11,268,976
10,057,745
8,715,602
8,586,443
7,527,817
6,669,789
6,470,379
6,036,900
5,128,517
3,878,679
3,896,092
3,413,329
2,960,784
2,695,867
1,104,209
702,100
440,189
435,449
425,966
297,477
277,264
266,440
216,226
186,917
162,157
116,812
108,814
89,258
70,844
69,655
67,897
41,934
38,763
21,730
19,350
12,738
8,995
7,367
554,988,441
30,618,697
26,437,044
16,438,102
15,802,999
15,006,473
11,449,006
9,930,915
9,294,208
9,247,816
8,230,617
7,413,097
7,057,131
6,829,969
5,639,057
3,969,048
4,191,948
3,547,346
3,150,218
2,798,060
1,062,529
725,215
460,486
440,486
442,119
307,451
281,859
299,107
225,168
206,941
172,884
118,432
108,210
90,303
72,480
69,080
69,842
47,762
39,619
24,004
22,336
13,854
9,638
7,581
589,768,747
82,398,326
60,180,529
60,094,648
57,998,353
48,055,439
40,217,413
38,622,660
22,380,273
16,223,248
10,655,774
10,625,945
10,322,151
10,330,824
10,251,087
10,102,022
8,970,306
82,369,548
61,279,972
60,943,912
58,145,321
46,629,669
40,491,051
38,671,560
22,246,862
16,645,313
10,673,520
10,722,816
10,287,955
10,403,951
10,220,911
10,171,079
9,045,389
Country
TLD
Map Coordinates
Longitude Latitude
47 20 N
13 20 E
43 00 N
25 00 E
47 00 N
8 00 E
48 40 N
19 30 E
56 00 N
10 00 E
64 00 N
26 00 E
62 00 N
10 00 E
47 00 N
29 00 E
45 10 N
15 30 E
44 00 N
18 00 E
53 00 N
8 00 W
56 00 N
24 00 E
41 00 N
20 00 E
57 00 N
25 00 E
41 50 N
22 00 E
46 07 N
14 49 E
59 00 N
26 00 E
49 45 N
6 10 E
35 50 N
14 35 E
65 00 N
18 00 W
49 15 N
2 10 W
54 15 N
4 30 W
42 30 N
1 30 E
49 28 N
2 35 W
62 00 N
7 00 W
47 16 N
9 32 E
43 44 N
7 24 E
43 46 N
12 25 E
36 8 N
5 21 W
Austria
.ay
Bulgaria
.bg
Switzerland
.ch
Slovakia
.sk
Denmark
.dk
Finland
.fi
Norway
.no
Moldova
.md
Croatia
.hr
.ba
Ireland
.ie
Lithuania
.lt
Albania
.al
Latvia
.lv
Macedonia
.mk
Slovenia
.si
Estonia
.ee
Luxembourg
.lu
Malta
.mt
Iceland
.is
Jersey
.je
Isle of Man
.im
Andorra
.ad
Guernsey
.gg
Faroe Islands
.fo
Liechtenstein
.li
Monaco
.mc
San Marino
.sm
Gibraltar
.gi
4 Asia, Australia & NZ, Oceania
Indonesia
.id
5 00 S
Pakistan
.pk 30 00 N
Russia
.ru 60 00 N
Bangladesh
.bd 24 00 N
Japan
.jp 36 00 N
Philippines
.ph 13 00 N
Vietnam
.vn 16 00 N
Thailand
.th 15 00 N
Korea South
.kr 37 00 N
Burma
.mm 22 00 N
Nepal
.np 28 00 N
4 Asia, Australia & NZ, Oceania (cont’d)
Malaysia
.my
2 30 N
Korea North
.kp 40 00 N
Sri Lanka
.lk
7 00 N
Australia
.au 27 00 S
Kazakhstan
.kz 48 00 N
Cambodia
.kh 13 00 N
Laos
.la 18 00 N
Papua New Guinea
.pg
6 00 S
Singapore
.sg
1 22 N
New Zealand
.nz 41 00 S
Mongolia
.mn 46 00 N
Bhutan
.bt 27 30 N
East Timor
.tp
8 50 S
Fiji
.fj 18 00 S
Solomon Islands
.sb
8 00 S
Macau
.mo 22 10 N
Brunei
.bn
4 30 N
Maldives
.mv
3 15 N
Pop in 2003
Est Pop in 2008
8,162,656
7,588,399
7,408,319
5,416,406
5,394,138
5,204,405
4,555,400
4,439,502
4,422,248
3,989,018
3,924,023
3,592,561
3,526,642
2,348,784
2,063,122
1,935,677
1,408,556
456,764
400,420
280,798
90,156
74,261
69,150
64,818
46,345
33,145
32,130
28,119
27,776
574,412,736
8,205,533
7,262,675
7,581,520
5,455,407
5,484,723
5,244,749
4,644,457
4,496,774
4,485,046
4,074,523
4,156,119
3,563,834
3,619,778
2,275,236
2,101,268
1,945,522
1,380,099
486,006
414,792
286,961
91,533
76,220
72,413
65,726
47,770
34,498
32,796
29,973
28,002
576,592,782
120
70
100
90
138
122
106
100
127
98
84
00
00
00
00
00
00
00
00
30
00
00
E
E
E
E
E
E
E
E
E
E
E
234,893,453
150,694,740
144,526,278
138,448,210
127,214,499
84,619,974
81,624,716
64,265,276
48,289,037
42,510,537
26,469,569
252,259,409
165,554,764
142,825,040
153,546,901
127,425,722
92,681,453
87,036,308
67,070,696
49,712,837
43,420,302
29,519,114
112
127
81
133
68
105
105
147
103
174
105
90
125
175
159
113
114
73
30
00
00
00
00
00
00
00
48
00
00
30
55
00
00
33
40
00
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
23,092,940
22,466,481
19,742,439
19,731,984
16,763,795
13,124,764
5,921,545
5,295,816
4,608,595
3,951,307
2,712,315
2,139,549
997,853
868,531
509,190
441,487
358,098
329,684
25,259,428
23,479,089
20,532,150
20,600,856
17,068,212
14,370,513
6,677,534
5,921,144
5,432,809
4,154,311
2,916,865
2,376,680
1,107,432
931,545
581,208
460,823
393,551
379,174
SAT
#
Page 35
Page 36
SAT
#
Country
French Polynesia
New Caledonia
Vanuatu
Samoa
Guam
Micronesia
Tonga
Kiribati
American Samoa
Marshall Islands
Cook Islands
Palau
Wallis and Futuna
Nauru
Tuvalu
5 Africa
Nigeria
Egypt
Ethiopia
Congo (Kinshasa)
South Africa
Sudan
Tanzania
Algeria
Kenya
Morocco
Uganda
Ghana
Mozambique
Cote d'Ivoire
Madagascar
Cameroon
Burkina Faso
Zimbabwe
Malawi
Mali
Niger
Angola
5 Africa (cont’d)
Senegal
Zambia
Tunisia
Chad
Guinea
Somalia
Rwanda
Benin
Burundi
Sierra Leone
Libya
Togo
Eritrea
Liberia
Congo (Brazzaville)
Mauritania
Namibia
Lesotho
Botswana
TLD
.pf
.nc
.vu
.ws
.gu
.fm
.to
.ki
.mp
.as
.mh
.ck
.pw
.wf
.nr
.tv
Map Coordinates
Longitude Latitude
15 00 S 140 00 W
21 30 S 165 30 E
16 00 S 167 00 E
13 35 S 172 20 W
13 28 N 144 47 E
6 55 N 158 15 E
20 00 S 175 00 W
1 25 N 173 00 E
15 12 N 145 45 E
14 20 S 170 00 W
9 00 N 168 00 E
21 14 S 159 46 W
7 30 N 134 30 E
13 18 S 176 12 W
0 32 S 166 55 E
8 00 S 178 00 E
Pop in 2003
Est Pop in 2008
262,125
210,798
199,414
178,173
163,593
108,143
108,141
98,549
76,129
57,844
56,429
21,008
19,717
15,734
12,570
11,305
282,645
224,585
215,053
176,418
175,877
107,673
118,993
110,252
86,616
57,496
63,139
21,923
21,093
16,448
13,770
12,181
1,288,212,334
1,365,400,032
.ng
.eg
.et
.cd
.za
.sd
.tx
.dz
.ke
.ma
.ug
.gh
.mz
.ci
.mg
.cm
.bf
.zw
.mw
.ml
.ne
.ao
10
27
8
0
29
15
6
28
1
32
1
8
18
8
20
6
13
20
13
17
16
12
00
00
00
00
00
00
00
00
00
00
00
00
15
00
00
00
00
00
30
00
00
30
N
N
N
N
S
N
S
N
N
N
N
N
S
N
S
N
N
S
S
N
N
S
8
30
38
25
24
30
35
3
38
5
32
2
35
5
47
12
2
30
34
4
8
18
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
30
E
E
E
E
E
E
E
E
E
W
E
W
E
W
E
E
W
E
E
W
E
E
133,881,703
74,718,797
66,557,553
56,625,039
42,768,678
38,114,160
35,922,454
32,818,500
31,639,091
31,689,265
25,632,794
20,467,747
18,567,855
16,962,491
16,979,744
15,746,179
13,228,460
12,576,742
11,651,239
11,626,219
11,058,590
10,766,471
150,456,422
81,635,832
72,756,929
65,647,444
41,583,442
43,354,411
39,651,247
35,508,090
33,232,555
34,272,968
29,745,337
21,781,326
19,517,722
18,779,999
19,757,525
17,322,189
15,005,565
12,891,546
12,912,080
13,315,573
12,594,396
11,828,736
.sn
.zm
.tn
.td
.gn
.so
.rw
.bj
.bi
.si
.ly
.tg
.er
.cf
.lr
.cg
.mr
.na
.ls
.bw
14
15
34
15
11
10
2
9
3
8
25
8
15
7
6
1
20
22
29
22
00
00
00
00
00
00
00
30
30
30
00
00
00
00
30
00
00
00
30
00
N
S
N
N
N
N
S
N
S
N
N
N
N
N
N
S
N
S
S
S
14
30
9
19
10
49
30
2
30
11
17
1
39
21
9
15
12
17
28
24
00
00
00
00
00
00
00
15
00
30
00
10
00
00
30
00
00
00
30
00
W
E
E
E
W
E
E
E
E
W
E
E
E
E
W
E
W
E
E
E
10,580,307
10,307,333
9,924,742
9,253,493
9,030,220
8,025,190
7,810,056
7,041,490
6,096,156
5,732,681
5,499,074
5,429,299
4,362,254
3,683,538
3,317,176
2,954,258
2,912,584
1,927,447
1,861,959
1,573,267
11,963,359
11,036,192
10,451,738
10,705,847
10,240,047
9,379,907
8,534,202
8,090,245
6,890,232
6,419,348
6,173,579
6,037,624
4,903,499
3,966,890
3,755,746
3,148,474
3,364,940
2,020,790
1,867,178
1,476,653
Country
Gambia
Guinea-Bissau
Gabon
Mauritius
Swaziland
Reunion
Comoros
Equatorial Guinea
Djibouti
Cape Verde
Western Sahara
Mayotte
Seychelles
6 India
India
7 Middle East
Turkey
Afghanistan
Uzbekistan
Azerbaijan
Tajikistan
Georgia
Kyrgyzstan
Turkmenistan
Armenia
Iran
Iraq
Saudi Arabia
Yemen
Syria
Israel
Jordan
Lebanon
Oman
7 Middle East (cont’d)
West Bank
Kuwait
Gaza Strip
Qatar
Cyprus
Bahrain
8 China
China
Taiwan
Hong Kong S.A.R.
TLD
.gm
.gw
.ga
.mu
.sz
.re
.km
.gq
.dj
.cv
.eh
.yt
.st
.sc
Map Coordinates
Longitude Latitude
13 28 N
16 34 W
12 00 N
15 00 W
1 00 S
11 45 E
20 17 S
57 33 E
26 30 S
31 30 E
21 06 S
55 36 E
12 10 S
44 15 E
2 00 N
10 00 E
11 30 N
43 00 E
16 00 N
24 00 W
24 30 N
13 00 W
12 50 S
45 10 E
1 00 N
7 00 E
4 35 S
55 40 E
Pop in 2003
Est Pop in 2008
1,501,050
1,360,827
1,321,560
1,210,447
1,161,219
755,171
632,948
510,473
457,130
412,137
261,794
178,437
175,883
80,469
857,341,840
1,735,708
1,505,287
1,492,588
1,260,781
1,175,886
808,506
731,281
575,827
506,221
426,113
289,755
216,334
205,901
82,247
944,990,259
1,049,700,118
1,049,700,118
1,125,368,288
1,125,368,288
.in
20 00 N
77 00 E
.tr
.af
.uz
.az
.tj
.ge
.kg
.tm
.am
.ir
.iq
.sa
.ye
.sy
.il
.jo
.lb
.om
.ae
39
33
41
40
39
42
41
40
40
32
33
25
15
35
31
31
33
21
24
00
00
00
30
00
00
00
00
00
00
00
00
00
00
30
00
50
00
00
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
35
65
64
47
71
43
75
60
45
53
44
45
48
38
34
36
35
57
54
00
00
00
30
00
30
00
00
00
00
00
00
00
00
45
00
50
00
00
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
68,109,469
28,717,213
25,981,647
7,830,764
6,863,752
4,934,413
4,892,808
4,775,544
3,326,448
68,278,826
24,683,313
24,293,844
19,349,881
17,585,540
6,116,533
5,460,265
3,727,703
2,807,125
2,484,818
71,892,807
32,385,402
28,268,440
8,079,043
7,653,394
4,835,250
5,275,652
5,232,077
3,344,694
72,061,076
28,221,181
28,610,332
22,993,911
19,747,586
6,500,389
6,198,677
3,967,467
3,309,440
2,682,747
32
29
1
25
35
26
00
30
25
30
00
00
N
N
N
N
N
N
35
45
34
51
33
50
15
45
20
15
00
33
E
E
E
E
E
E
2,237,194
2,183,161
1,274,868
817,052
771,657
667,238
338,171,076
2,611,904
2,596,799
1,537,269
928,635
792,604
718,306
370,445,082
105 00 E
1,286,975,468
1,325,716,960
114 10 E
22,603,000
7,394,170
23,308,370
7,820,243
1,316,972,638
1,356,845,573
.kw
.qa
.cy
.bh
.cn
.tw
.hk
35 00 N
22 15 N
SAT
#
Page 37
T
his Agreement of Limited Partnership of SWANsat Territory 1, Ltd., is made and entered into by and among SWANsat 1,
Inc. (the “General Partner”) and the Limited Partner (as defined herein):
ARTICLE I
Defined Terms
Certain defined terms used in this Agreement shall have the meanings ascribed to them below:
“Act” means the Securities Act of 1933 as amended or superseded.
“Affiliate” with respect to any Person means: (i) any other Person which directly or indirectly controls, is controlled by, or is
under common control with such Person or any of its Affiliates (for the purposes of this definition, “controls” includes being a
part of a ”control group” as said term is commonly understood for securities law purposes which has effective control over
such other Person); (ii) any company, 10% or more of whose voting securities or interests are directly or indirectly owned,
controlled or held with power to vote, by such Person or any of its Affiliates; (iii) any officer, director or partner of such
Person or any of its Affiliates; and (iv) any company or other entity for which such Person acts as an officer, director or
partner. Notwithstanding anything to the contrary set forth in this definition, no Partner in the Partnership shall be deemed to
be an Affiliate of any other Partner in the Partnership solely by virtue of the fact that they are both Partners in the Partnership.
“Agreement” means this Agreement of Limited Partnership, as amended, modified, or supplemented from time to time.
“Assignee” means a Person to whom one or more Limited Partnership Units have been transferred, by assignment or
otherwise, but who has not been admitted as a Limited Partner and who thereby has an interest in the Partnership equivalent to
that of a Limited Partner but that is (a) limited to the rights and obligations appurtenant to a Limited Partnership Unit to a
share in the profits, gains, losses, deductions, credits, and Distributions, including liquidating Distributions, and (b) otherwise
subject to the limitations under the Act pertaining to the rights of an assignee who has not become a Substituted Limited
Partner.
“Available Cash Flow” means, for any fiscal period of the Partnership, Taxable Income or Taxable Loss (other than Taxable
Income or Taxable Loss arising from the sale or other disposition of all or substantially all of the Partnership’s assets) plus
depreciation, amortization, cost recovery and any other non-cash items deducted in computing such Taxable Income or
Taxable Loss, and the release of funds from reserves, less the sum of: (i) all cash expenditures incurred incident to the
operations of the Partnership’s business, including, without limitation, payment of the fees to the General Partner and its
Affiliates, and not included in the computation of Taxable Income or Taxable Loss; and (ii) the establishment of appropriate
reserves for working capital and future liabilities as herein provided.
“Capital Account” means an account maintained on the books of the Partnership for each Partner and Assignee pursuant to
ARTICLE VII, Section 4, below.
“Capital Contribution” of a Limited Partner shall mean that amount of capital contributed to the Partnership In the form of
Units purchased.
“Certificate of Limited Partnership” means the certificate of limited partnership, as amended from time to time, filed by the
Partnership under the Act with the California Secretary of State.
“Closing Date” means each date designated by the General Partner of which purchasers of Limited Partnership Units are
accepted as Limited Partners.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, together with the Treasury Regulations
promulgated thereunder, or the corresponding provisions of any succeeding law.
“Contributed Property” means property (other than cash) transferred to the Partnership by a Partner as a contribution to the
capital of the Partnership.
AGREEMENT OF LIMITED PARTNERSHIP
of
SWANSAT TERRITORY 1, LTD.
Page 2
Agreement of Limited Partnership — SWANsat Territory 1, Ltd.
“Deferment” means an amount paid to management and others at the discretion of the General Partner from Gross Receipts
prior to payments to the Limited Partners.
“Departing Partner” means a General Partner, as of the effective date of any withdrawal or removal of such General Partner.
“Distributions” means amounts paid or payable to Partners or Record Holders pursuant to ARTICLE IX and ARTICLE X,
Section 1, and upon the liquidation of the Partnership.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“First Closing” means the first closing of the sale of Limited Partnership Units.
“Fiscal Year” shall have the meaning set forth in ARTICLE XIII, Section 1.
“General Partner” means SWANsat 1, Inc., but in the event that such party is at any time no longer acting as General
Partner, the term shall mean the parties or party then acting in such capacity.
“General Partner’s Interest” means the General Partner’s interest in the Partnership as General Partner (and does not
include its interest as a Limited Partner to the extent it acquires Limited Partnership Units).
“Gross Receipts” means all sums received by the Partnership from all sources whatsoever from the sale, distribution, and
exploitation of the Subscriber Accounts and/or blocks of Subscriber Accounts and any rights attributed thereto, including
sums payable upon the liquidation of the Partnership’s assets.
“Indemnitee” means any of those Persons to be indemnified pursuant to ARTICLE XVII, Section 14.
“Interests” means the General Partner’s Unit and Limited Partnership Units.
“Limited Partner” means any Person listed at any particular time as a Limited Partner on the books and records of the
Partnership, including any Substituted Limited Partner and the General Partner. Reference to a “Limited Partner” shall refer to
any one of them.
“Limited Partner’s Original Capital” means, with respect to each Limited Partnership Unit owned by a Limited Partner,
that amount equal to the amount used to purchase said Partnership Units, which amount shall be attributable to such Limited
Partnership Units in the hands of subsequent holders thereof.
“Limited Partnership Interest” means Limited Partners holding at least 75% of the voting rights of the Limited Partnership
Units held by all Limited Partners.
“Organizational and Offering Expenses” means all expenses, costs, disbursements and advances incurred or made by the
Partnership or by the General Partner on behalf of the Partnership in connection with the organization of the Partnership, the
qualification, exemption, offering and sale of the Limited Partnership Units, the preparation of this Agreement, the Private
Offering Memorandum, any sales literature or related material approved by the General Partner and which is intended by the
General Partner to be attached to or contain the Private Offering Memorandum, and the Subscription Agreement and related
documents, the qualification of the Partnership to do business in any jurisdiction in which its qualification may be necessary or
desirable, and planning and preparing for the operation and management of the Partnership following the Private Placement
and all expenses, disbursements and advancements related or incidental to any of the foregoing, including, without limitation:
(i) printing, mailing, filing, and recordation, and expenses; (ii) expenses of qualification and exemption of the Limited
Partnership Units under applicable federal and state securities laws, rules and regulations; (iii) legal (including tax advice) and
accounting fees and disbursements; (iv) transportation, meals, and lodging expenses incurred by the General Partner or any of
its Affiliates in connection with the foregoing activities; and (v) other expenses of a similar nature incurred by the Partnership,
the General Partner or any of its Affiliates in connection with such activities.
“Partners” means the General Partner and all Limited Partners, where no distinction is required by the context in which the
term is used herein.
“Partnership” means the limited partnership established by this Agreement.
Page 3
“Partnership Funds” means funds of the Partnership from any source which have not been committed or reserved for
expenditure.
“Person” means an individual, corporation, partnership, trust, unincorporated organization, or association.
“Preferred Capital Contribution” means Capital contributed and/or loaned to the Partnership which is not raised through
the sale of Partnership Units. Investors in this category do not become limited partners and do not participate in the profits of
the partnership based on their capital contribution unless their contribution is exchanged for Units in the Partnership. Such
investors are in first position for repayment and are paid interest equal to 10% of their Preferred Capital Contributions. Such
investors may, however, purchase Units in the Partnership equal to their Preferred Capital Contribution by exchanging the
repayment for Units.
“Presales” means the sale of individual Subscriber Accounts, or blocks of Subscriber Accounts, and any ancillary rights
thereto prior to the launch or commencement of operation of the SWANsat System.
“Private Offering Memorandum” means the Partnership’s Confidential Private Offering Memorandum, including any
exhibits or schedules attached thereto and made a part thereof with the consent of the General Partner, as the same may be
amended, supplemented or modified from time to time.
“Private Placement” means the sale by the Partnership of Limited Partnership Units at a price of $10,000 per Limited
Partnership Unit pursuant to an exemption from registration under the Securities Act.
“Profits” has the meaning set forth in ARTICLE X, Section 1.
“Recapture Income” means any gain recognized by the Partnership but computed without regard to any adjustment required
by Section 734 or 743 of the Code upon the disposition of any asset of the Partnership that is not capital gain because such
gain represents the recapture of deductions previously taken for federal income tax purposes with respect to such asset.
“Record Date” means the date established by the Partnership for determining the identity of Persons: (i) entitled to notice of
or to vote at any meeting of the Partnership, entitled to vote by ballot or give consent to Partnership action in writing without a
meeting or entitled to exercise rights in respect of any other lawful action; or (ii) entitled to receive any report or Distribution
from the Partnership as a Partner or Assignee.
“Record Holder” means at any time the Person shown on the records of the Partnership as the owner (whether as Limited
Partners or Assignees) of a Limited Partnership Unit:
“Reserve Fund” means a fund to be established by the Partnership on the Closing Dates in an amount or amounts to be
established by the General Partner, from time to time, in its sole discretion.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Service” means the Internal Revenue Service.
“Subscription Agreement” means the Subscription Agreement, in the form included herein, pursuant to which Persons
wishing to become Limited Partners to this Agreement must subscribe.
“Substituted Limited Partner” means a Person admitted to the Partnership as a substituted limited partner pursuant to
ARTICLE XII, Section 3.
“Partnership Expense” means expenses incurred in connection with the operation and administration of the Partnership,
including but not limited to the expenses of establishing and maintaining an office for the Partnership, printing, mailing, filing
and recordation expenses, expenses of maintaining the qualification and exemption of the Limited Partnership Units under
applicable federal and state securities laws, rules and regulations, legal (including tax advice) and accounting fees and
disbursements, transportation, meals and lodging expenses incurred by the Partnership or any of its Affiliates in connection
with the foregoing activities, and other expenses of a similar nature incurred by the Partnership, the General Partner or any of
its Affiliates in connection with such activities, provided; however, that “Partnership Expenses” shall not include
Organizational and Offering Expenses.
Page 4
“Taxable Income or Taxable Losses” means, with respect to any fiscal year, the net income or net losses of the Partnership
for such period, as determined for federal income tax purposes, including, as appropriate, each item of income, gain, loss, or
deduction entering into such determination, and in accordance with the accrual method of accounting on a calendar basis.
“Termination Date” means 365 days from the date of the Private Offering Memorandum, which date may be extended by the
General Partner in its sole discretion, for a period or periods of up to an aggregate of an additional 365 days.
“Territory” generally means North America, including the United States, Canada, Bermuda and Greenland, and more
specifically those countries delineated under the row header SAT # 1 in the SUBSCRIBER AREA TERRITORIES table set
forth in the Memorandum. Said territory may be adjusted from time to time by SWANsat Marketing, LLC as SWANsat
Marketing, LLC determines in its sole discretion, including removal, addition, or trades of countries in the Territory or among
other Partnerships.
“Treasury Department” means the United States Department of the Treasury.
“Treasury Regulations” means the regulations promulgated by the Department of Treasury under the Code.
“Unit” means an interest in the Limited Partnership, priced at $10,000 per Unit.
ARTICLE II
Name
The name of the Partnership shall be, and the business of the Partnership shall be conducted under the name of, SWANsat
Territory 1, Ltd., or such other name as the General Partner shall hereafter deem necessary appropriate, or desirable. The
words “Ltd.,” “Limited,” or “Limited Partnership” or other similar term or terms shall be included in the name where
necessary for purposes of complying with the laws of any jurisdiction that so requires.
ARTICLE III
Purpose
The purpose and business of the Partnership shall be to market individual Subscriber Accounts in the SWANsat System, as
more fully described in the SWANsat Private Placement Memorandum and/or the SWANsat Marketing Plan and
Information Memorandum, and to participate in the revenues, if any, from the sale, distribution, and further exploitation of
the Subscriber Accounts in the Partnership’s Territory, and to engage in any and all activities and enter into and perform
obligations of any kind necessary to, in connection with, or related or incidental to the accomplishment of such purposes. The
Partnership shall not engage in any other business without the consent of the General Partner and a Majority in Interest.
ARTICLE IV
Names and Addresses of Partners
The name and address of the General Partner and the names and addresses of the Limited Partners shall be maintained in the
books and records of the Partnership.
ARTICLE V
Term
The term of the Partnership shall commence on the filing date of the Certificate of Limited Partnership with the California
Secretary of State and shall continue until December 31, 2030 (on which date the Partnership will be dissolved and wound up)
unless extended or sooner terminated as provided in ARTICLE XVIII or by operation of law or judicial decree.
ARTICLE VI
Principal Place of Business; Registered Offices
Section 1. Principal Place of Business. The mailing address of the principal office of the Partnership shall be SWANsat
Territory 1, Ltd., 215 E. Orangethorpe Avenue, #300, Fullerton, CA 92832-3017, tel: 714-738-1938, fax: 831-417-5270, email: [email protected].
Section 2. Registered Office. The mailing address of the registered office of the Partnership in the State of California is
located at SWANsat Territory 1, Ltd., 215 E. Orangethorpe Avenue, #300, Fullerton, CA 92832-3017, and the registered
Page 5
ARTICLE VII
Partners’ Capital
Section 1. Partners. For purposes of this Agreement, the Partners of the Partnership shall include the General Partner and the
Limited Partners. If the General Partner purchases Limited Partnership Units, then, in addition to its rights and liabilities as a
General Partner, it shall have with respect to such Limited Partnership Units all the rights and liabilities of a Limited Partner
as provided by law and in this Agreement, including the right to allocations of Net Income and Net Loss and Distributions.
Section 2. General Partner’s Capital Contribution. The General Partner, as a general partner, has made no contribution to the
capital of the Partnership on formation of the Partnership and shall not be required to make any capital contribution to the
Partnership.
Section 3. Issuance of Limited Partnership Units. The Partnership is authorized to issue and sell by means of the Private
Placement a total of 100,000 Limited Partnership Units at a price of $10,000 per Limited Partnership Unit on the terms and
conditions set forth in the Private Offering Memorandum. The Limited Partnership Units shall be issued on the Closing Dates
in accordance with the Private Offering Memorandum. No Limited Partnership Units will be issued and no Person will be
admitted as a Limited Partner (other than as a Substituted Limited Partner or pursuant to ARTICLE XIV, Section 4) after the
Final Closing Date.
Section 4. Capital Accounts.
A. A separate Capital Account shall be maintained for the General Partner and each Limited Partner.
B. The Capital Account of each Partner shall be (i) credited with the cash and the Carrying Value of any property (net
of liabilities assumed by the Partnership and liabilities to which the Contributed Property is subject) contributed to
the Partnership by such Partner, plus all income, gain, or Profits of the Partnership computed in accordance with
ARTICLE VII, Section 4, Paragraph C herein and allocated to such Partner pursuant to ARTICLE X herein
(including, for purposes of ARTICLE VII, Section 4, income and gain exempt from tax); and (ii) debited with the
sum of (a) all losses or deductions of the Partnership computed in accordance with ARTICLE VII, Section 4,
Paragraph C herein and allocated to such Partner pursuant to ARTICLE X herein; (b) such Partner’s distributive
share of expenditures of the Partnership described in Section 705(a)(2)(B) of the Code; and (c) all cash and the fair
market value of any property (net of liabilities assumed by such Partner and liabilities to which such property is
subject) distributed by the Partnership to such Partner pursuant to ARTICLE IX and ARTICLE XVIII herein.
Notwithstanding anything to the contrary contained herein, the Capital Account of a Partner shall be determined in
all events solely in accordance with the rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv) as the same
may be amended or revised hereafter. To the extent that any provision of this Agreement is inconsistent with the
requirements of Treasury Regulation Section 1.704-1(b)(2)(iv), or the corresponding provisions of any succeeding
law, such Treasury Regulation or provision shall control. Any references in this Agreement to the Capital Account of
a Partner shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time
as set forth above.
C. For purposes of computing the amount of any item of income, gain, deduction, or loss to be reflected in a Partner’s
Capital Account, the determination, recognition, and classification of each such item shall be the same as its
determination, recognition, and classification for federal income tax purposes, provided that:
(1) Any deductions for depreciation, cost recovery, amortization, or expense in lieu of depreciation, attributable to a
Partnership asset. contributed to the Partnership shall be determined as if the Adjusted Basis of such Partnership
asset on the date it was acquired by the Partnership was equal to the value of such Partnership asset as of such
date.
(2) Any income, gain, or loss attributable to the taxable disposition of any Partnership asset shall be determined by
the Partnership as if the Adjusted Basis of such Partnership asset as of such date of disposition was equal to the
amount of the Carrying Value of such Partnership asset as of such date.
agent of the Partnership for service of process shall be at the same address. The General Partner may from time to time change
the mailing address of the registered office of the Partnership in the state of California and, in such event, shall file an
amendment to the Certificate of Limited Partnership.
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(3) In the case of any transfer of a Limited Partnership Unit to which Code Section 743 would apply, the
computation of all items of income, gain, loss, and deduction shall be made without regard to any election under
Section 754 of the Code that may be made by the Partnership.
D. Immediately prior to the Distribution of any Partnership assets, the Capital Accounts of all Partners shall,
immediately prior to any such Distribution, be adjusted (consistent with the provisions herein) upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to such distributed Partnership assets (as if such
Unrealized Gain or Unrealized Loss had been recognized upon an actual sale of such properties immediately prior to
such Distribution and was allocated to the Partners, at such time, pursuant to ARTICLE X, Section 1 herein). The
Unrealized Gain or Unrealized Loss shall be determined by the General Partner based upon reports of independent
experts or appraisers. The Unrealized Gain or Unrealized Loss shall be allocated among Partnership assets in a
manner determined by the General Partner based upon reports of independent experts or appraisers.
E. A transferee of a Unit shall succeed to the Capital Account attributable to the transferred Unit, and there shall be no
adjustment to the Capital Account as a result of such transfer. If the transfer causes a termination of the Partnership
under Section 708(b)(1)(B) of the Code, however, Partnership assets shall be deemed to have been distributed in
liquidation of the Partnership to the Partners (including the transferee of the Unit) pursuant to ARTICLE XVIII,
Section 3 and ARTICLE XVIII, Section 3 herein and re-contributed by such Partners in the immediate reconstitution
of the Partnership Upon such re-contribution, the Partnership properties shall be treated as Contributed Property, and
the Capital Accounts of the Partners in such reconstituted Partnership shall be maintained in accordance with the
principles of this ARTICLE XII, Section 4.
Section 5. No Withdrawal of Capital Contribution. A Partner shall not be entitled to withdraw any part of his capital
contribution or his Capital Account except to the extent, if any, that Distributions made pursuant to this Agreement or upon
termination of the Partnership may be considered as such by law, and then only to the extent provided in this Agreement.
Section 6. Negative Capital Accounts. No Partner or Assignee shall be required to pay to the Partnership or to any other
Partner or Assignee any deficit or negative balance which may exist from time to time in such Partner’s or Assignee’s Capital
Account.
Section 7. Dilution and Additional Capital Call. In the event that the Limited partnership Agreement is amended to increase
the amount of the maximum offering, then each Partner's capital account shall be diluted in direct proportion to the amount
that such additional offering bears to the maximum offering set forth in this Limited Partnership Agreement.
Section 8. Letter of Credit Financing. A Partner may purchase Units in the Limited Partnership through the use of an
irrevocable standby letter of credit in favor of the partnership and in a form and from a bank acceptable to the General Partner
in an amount equal to the price of the Units desired.
Section 9. Pre-Sale Financing. The General Partner may reduce the amount of the minimum offering required in the Limited
Partnership Agreement through the use of pre-sales of Subscription Accounts provided the General Partner assents to such a
sale of rights and the price obtained for such rights is determined by the General Partner to be fair and reasonable.
ARTICLE VIII
Expenses, Certain Reimbursements, and Other
Compensation to the General Partner and its Affiliates.
Section 1. Expenses of the Partnership. The Partnership shall pay all Organizational and Offering Expenses. To the extent
practicable, all Organization and Offering expenses shall be billed directly to and shall be payable by the Partnership.
Section 2. Priority of Payments. Prior to the making of any Distributions to the Partners pursuant to ARTICLE IX herein or
upon the liquidation of the Partnership, Partnership Funds shall be applied in the following order of priority:
A. First, to the General Partner and its Affiliates in reimbursement, without interest, of any Partnership Expenses paid
by them; and
B. Second, in payment of all other current Partnership Expenses and the establishment of reasonable reserves in such
amounts as determined by the General Partner in its sale discretion.
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Section 1. Distribution and Allocation of Gross Receipts. Gross Receipts, if any will be allocated in the following order of
priority:
A. The General Partner shall receive compensation of $5,000 per week retroactive to the Offer Date as an expense to
the Partnership.
B. Pay the operating expenses of the Partnership, including amortized costs for the design, construction, insurance,
launch, and replacement costs of the satellites and the Satellite Network Operation Center(s) (SNOCs), and any
deferred payments to management.
C. Pay for the Partnership’s on-going pro rata share of the promotion and advertising of the SWANsat System,
including a fee of 5% of gross billings for the funding of independently produced family-oriented theatrical motion
pictures which will be distributed through the SWANsat System to Subscribers as part of the entertainment service
distributed by SWANsat.
D. Pay for the establishment of a reasonable reserve, as may be set aside by the General Partner in its discretion from
time to time for the anticipated expenses of the Partnership, the remainder of which reserve will be distributed upon
the liquidation of the Partnership.
E. Repay any Preferred Capital Contributions until the Preferred Capital Contributors have recouped an amount equal
to 110% of their Preferred Capital Contributions.
F.
G. Further Gross Receipts, if any after all of the above allocations, shall be characterized as Profits and will be paid
20% to the Limited Partners in the same proportions as their Capital Contributions bear to the aggregate Capital
Contributions of $1,000,000,000 from all Limited Partners (including in the sum of said aggregate Capital
Contributions), and 80% to the General Partner.
Section 2. Timing of Distributions. Distributions of Gross Receipts shall be made at such time or times and in such amounts as
the General Partner, in its sole discretion, may determine.
Section 3. Withholding. The Partnership may withhold from any Distribution the amount so required by applicable federal and
state income tax laws with respect thereto. Any amount so withheld and not at that time treated as held in trust for the benefit
of the United States or any state shall be held in trust for the benefit of the Person otherwise entitled thereto until such time as:
(i) such amount is paid to the United States or any state pursuant to law; or (ii) the General Partner determines that the
aggregate of the amounts so withheld are in excess of any present or future withholding tax liability in respect of the Person
otherwise entitled to such Distribution, in which event the Partnership shall pay such excess, together with any interest earned
or accrued thereon as provided below, to the Person entitled thereto. The General Partner, in its sole and absolute discretion,
may make such elections in respect of withholdings as are permitted by applicable federal and state income tax laws. The
General Partner may require appropriate documentation with respect to any Distribution that the recipient of the Distribution
may receive such Distribution free of withholding under applicable federal or state income tax laws. Any amount deposited in
respect of a withholding tax requirement in advance of the time such amount would otherwise have been distributed (or which
would not otherwise have been distributed) shall be treated as distributed at the time of such deposit. Nothing in this
ARTICLE IX, Section 3 shall be construed as in any way limiting the right of the Partnership or the General Partner to obtain
reimbursement, whether from a recipient of a Distribution or otherwise, for any taxes the Partnership or General Partner may
be required to pay in respect of any actual or constructive Distribution or for any excess Distribution resulting from
withholding tax requirements, and the Limited Partnership Units of a Limited Partner whose status gives rise to such
withholding obligation are pledged as security for such reimbursement.
ARTICLE X
Allocations of Profits and Losses
Section 1. Profits and Losses. That portion, if any, of the Partnership’s funds, after the repayment of all Capital Contributions
and operating expenses and the establishment of operating reserves as described in ARTICLE IX, Section 1, shall be
ARTICLE IX
Distributions
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characterized as profits and will be distributed as described in ARTICLE IX, Section 1 from time to time as the General
Partner, in its sole discretion, deems proper.
Section 2. Tax Allocations.
For federal income tax purposes, Taxable Income and Taxable Losses for any fiscal period of the of the Partnership shall be
allocated, after consultation with the Partnership’s accountants, as follows.
A. Taxable Income for any fiscal period of the Partnership shall be allocated in the same order of priority as Gross
Receipts.
B. Taxable Losses suffered and incurred by the Partnership, in an amount up to but not exceeding the aggregate of all
Capital Contributions, shall be allocated 99% to the Limited Partners, which amount shall be allocated to each
Limited Partner in the same proportion as his Capital Contribution bears to the aggregate Capital Contributions of all
Limited Partners, and 1% to the General Partner. Thereafter, to the extent of any Taxable Income, the General
Partner and Limited Partners shall share Taxable bosses pro rata in the same proportions as they are entitled to share
Profits; provided, that any Taxable Losses suffered and incurred in excess of previously allocated Taxable Income
shall be allocated 100% to the General Partner.
ARTICLE XI
Certain Representations of the Limited Partners
Section 1. Certain Representations of the Limited Partners. Each Limited Partner, as of each date upon which he acquires
Limited Partnership Units, hereby remakes and confirms to the General Partner and the other Limited Partners the
representations and warranties made by him in his Subscription Agreement and his Investor Representation Letter, or, in the
case of a Substituted Limited Partner, his transfer documents.
Section 2. Indemnification. Each Limited Partner shall and does hereby agree to indemnify and hold harmless the Partnership,
the General Partner, any other person, if any, who controls either of such persons within the meaning of Section 20 of the
Exchange Act, the principals of the General Partner, and each other Limited Partner from any damages, liabilities, claims,
expenses, including attorney’s fees, losses or action resulting from a breach by such Limited Partner of or the untruth of any of
the warranties or representations contained or referred to in ARTICLE XI, Section 1 herein made by such Limited Partner.
Section 3. Right of Rescission. In the event that the General Partner discovers any breach or untruth of any of the
representations and warranties contained or referred to herein, the General Partner may, at its election forthwith rescind the
sale of any Limited Partnership Units to such Limited Partner and such Limited Partner shall cease to be a Limited Partner and
to have any rights as a Limited Partner as of the date of rescission. In the event of any such rescission by the General Partner,
the Capital Contributions or any other funds of such Limited Partner held by the Partnership or the General Partner or its
agent may, at the election of the General Partner, be retained and applied in satisfaction in whole or in part of the
indemnification obligation of the Limited Partner set forth ARTICLE XI, Section 2 herein.
ARTICLE XII
Transfer of Units
Section 1. Transfer.
A. The term “transfer,” when used in this ARTICLE XII with respect to a Unit shall include any sale, assignment, gift,
bequest, pledge, hypothecation, encumbrance, mortgage, exchange, or other disposition, whether voluntary or
involuntary.
B. Subject to the provisions of ARTICLE XI, Section 3 herein, no Unit shall be transferred, in whole or in part, except
in accordance with the terms and conditions set forth in this ARTICLE XII, and any transfer or purported transfer of
any Unit not made in accordance with this ARTICLE XII shall be null and void.
Section 2. Transfers of Interests of General Partner.
A. If the General Partner desires to sell or transfer all or any portion its General Partner interest to a Person who is not a
general partner of the Partnership, such transfer shall be permitted if (and only if):
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(2) the Partnership receives an opinion of counsel that such transfer and admission would not cause the Partnership
to be treated as an association taxable as a corporation for federal income tax purposes.
B. Neither ARTICLE XII, Section 2, Paragraph A nor any other provision of the Agreement shall be construed to
prevent (and each Record Holder, by signing a Subscription Agreement or transfer form making such Person a
Record Holder, is deemed to consent to):
(1) the addition, substitution, removal or withdrawal of any partner in any General Partner which is a partnership,
provided that such event does not cause a winding up or termination of the General Partner, or if such event
does cause a winding up or termination of the General Partner, that the business of the General Partner is
continued by a successor;
(2) the transfer by any General Partner of its General Partner Interest upon its merger or consolidation with another
Person or the transfer by it of all or substantially all of its assets to another Person, and the assumption of the
rights and duties of such General Partner by such Person, provided such Person furnishes to the Partnership an
opinion of independent counsel to the effect that such merger, consolidation, transfer, or assumption would not
cause the Partnership to be treated as an association taxable as a corporation for federal income tax purposes;
(3) the transfer by a General Partner of all or any part of its interest in items of Partnership income, gain, loss,
deduction, credit, or Distributions; or
(4) a General Partner’s mortgaging, pledging, hypothecating, or granting a security interest in all or part of its
General Partner Interest as collateral for a loan or loans; provided that in the case of a transfer of all of its
described interest under ARTICLE XII, Section 2, Paragraph B, Subparagraph (3) or under this Subparagraph
(4) of this ARTICLE XII, Section 2, Paragraph B, the General Partner agrees, notwithstanding Section 17702(a)(4) of the Act, to continue as the General Partner, and all Partners and Assignees hereby consent and
agree to such continuance.
C. In the event that a General Partner desiring to transfer all or a part of its General Partner Interest shall specify in its
notice to Limited Partners that it desires that the transferee be admitted as an additional or successor General Partner,
and if such transfer is approved by a Majority in Interest, or in the event of a merger or consolidation of a General
Partner and the General Partner is not the surviving corporation, or in the event of a sale of all or substantially all of
the assets of the General Partner to another Person, then, in any case, the additional, successor, surviving, or
resulting General Partner shall be admitted to the Partnership as a general partner upon execution of a counterpart of
this Agreement and, together with all then remaining general partners, if any, shall continue the business of the
Partnership without dissolution (provided that if a successor, surviving, or resulting General Partner is the sole
remaining General Partner and if such transferring General Partner intends to transfer its entire General Partner
Interest and withdraw from the Partnership, then such successor, surviving, or resulting entity shall be admitted as a
general partner immediately prior to the effective date of withdrawal of the withdrawing General Partner, and such
successor, surviving, or resulting General Partner shall continue the business of the Partnership without dissolution).
Section 3. Transfer of Limited Partnership Units.
A. Notwithstanding anything in this Agreement or the Act, no transfer of any Limited Partnership Unit shall be effective
unless and until the following conditions (the “Conditions”) have been satisfied:
(1) the General Partner, in its sole discretion, has given its prior written approval thereto;
(2) at the sole discretion of the General Partner, the transferor furnishes to the General Partner for the benefit of the
Partnership an opinion of counsel for such transferor satisfactory to the General Partner to the effect that the
transfer may be made without violation of the Securities Act and the securities laws (including the investor
suitability standards set forth in the Private Offering Memorandum) of any applicable jurisdiction;
(1) such transfer and, if applicable under ARTICLE XII, Section 2, Paragraph C, herein, the admission of the
transferee as a general partner of the Partnership, is approved by a Majority in Interest, unless the transferee is
an Affiliate of the transferring General Partner, in which case no such approval of the Limited Partners shall be
required; and
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(3) the transferee furnishes to the General Partner on behalf of the Partnership a written assignment in form and
substance acceptable to the General Partner executed by the transferee making all of the representations and
agreements of a Limited Partner contained in this Agreement;
(4) the transfer is of not less than five (5) Limited Partnership Units, subject to the General Partner’s discretion to
permit a transfer of less than five (5) Limited Partnership Units;
(5) the transferee pays the Partnership all costs and expenses, including attorneys’ fees, incurred by the Partnership
in connection with the transfer;
(6) the transferee executes an Irrevocable, limited power of attorney in favor of the General Partner for the purposes
set forth in this Agreement; and
(7) no Limited Partner transferring any of its Units owns less than one (1) Unit after such transfer.
If the Conditions are satisfied, the transferee shall become a Substituted Limited Partner hereunder on the date upon
which the General Partner has given its written consent to such substitution and at such time as an amendment to the
Certificate of Limited Partnership has been filed with the Secretary of State of California, the transfer is recorded on
the books of the Partnership, and each Limited Partner (including each Substituted Limited Partner) hereby consents
to the admission of Substituted Limited Partner by the General Partner in accordance with the terms of this
Agreement. It any involuntary transfer of a Limited Partnership Unit shall occur, such as (but not limited to) by way
of intestate succession, operation of law, or order of any judicial authority, the successor to the Limited Partnership
Unit of the Limited Partner shall become a Substituted Limited Partner hereunder only upon receipt of written
approval by the General Partner. If such approval is not given, the transferee, upon execution of such documents as
may be required by the General Partner, shall be an Assignee, Regardless of whether such substitution actually
occurs, however, the Limited Partner whose Limited Partnership Units are transferred, voluntarily or involuntarily,
shall be and remain obligated for the performance and payment of any and all obligations incurred, if any, by such
Limited Partner prior to the date of such transfer.
B. Notwithstanding any other provision of this Agreement, the transfer of any Limited Partnership Units and the
substitution of a Limited Partner shall be permitted by the General Partner if, in the sole discretion of the General
Partner, and according to the opinion of counsel satisfactory to the General Partner, such transfer and/or substitution
would not or could not affect the Partnership’s existence or qualification as a limited partnership under the Act, or
would not or could not cause a termination of the Partnership for federal income tax purposes, or would not or could
not otherwise have any adverse federal income tax consequences with respect to the Partnership or be in violation of
any provision of the Securities Act or any applicable state securities laws or require the Partnership to become a
“reporting company” under the Exchange Act.
C. Notwithstanding anything contained herein to the contrary, each Limited Partner agrees that any disposition of his
Limited Partnership Units shall be subject to compliance with the terms and provisions of this Agreement and the
Securities Act and the rules and regulations thereunder.
D. Notwithstanding any other provision of this ARTICLE XII, Section 3, the General Partner shall have a right of first
refusal to purchase any Limited Partnership Units to be transferred or assigned by a Limited Partner. The Limited
Partner shall give the General Partner written notice of the Limited Partner’s desire to transfer all or a portion of his
Limited Partnership Units. This notice shall specify the price agreed to be paid by the transferee for such Limited
Partnership Units, the terms of sale, and the anticipated date of transfer. At any time prior to the General Partner’s
grant of approval to the Limited Partner to transfer the Limited Partnership Units, the General Partner may purchase
the Limited Partner’s Limited Partnership Units at the same price and on the same terms as offered by the proposed
transferee.
E. Any Limited Partner may transfer Units to a personal or family trust and/or any beneficiary of said personal or
family trust, to a charitable remainder unitrust and/or any beneficiary of said charitable remainder unitrust, or to
other similar estate planning entity or entities created by and/or administered by said Limited Partner provided any
such transfer does not materially affect the General Partner’s rights hereunder or the rights of the General Partner to
manage the affairs of the Partnership. Any such transfer shall not be deemed to be a transfer subject to the General
Partner’s right of first refusal and may be made without the consent of the General Partner. The transferring Limited
Partner, however, must provide to the General Partner a legal opinion letter at the expense of the Limited Partner
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Section 4. Record Holders.
A. The Partnership shall be entitled to treat each Record Holder as the Limited Partner or Assignee-in-fact of any
Limited Partnership Unit and, accordingly, shall not be required to recognize any equitable or other claim or interest
in or with respect to such Limited Partnership Unit on the part of any other Person, regardless of whether it shall
have actual or other notice thereof, except as otherwise required by law.
B. Each distribution in respect of a Limited Partnership Unit shall be paid only to the Record Holder of such Limited
Partnership Unit as of the Record Date set for such distribution. Such payment shall constitute full payment and
satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may
have a Unit in or with respect to such payment by reason of any assignment or otherwise.
ARTICLE XIII
Fiscal Year; Books and Records
Section 1. Fiscal Year. The Fiscal Year of the Partnership shall be the calendar year ending December 31 of each year, or
such other period as the General Partner shall determine pursuant to the Code.
Section 2. Books and Records: Accrual Basis. Proper and complete records and books of account shall be kept by the General
Partner in which there shall be entered fully and accurately all transactions and other matters relative to the Partnership’s
business as are usually entered into records and books of account maintained by persons engaged in business of a like
character. The Partnership books and records shall be prepared In accordance with generally accepted accounting principles,
consistently applied, and shall be kept on the accrual for tax and accounting purposes. Any record maintained by or on behalf
of the Partnership in the regular course of its business, including, without limitation, the record of holders of Limited
Partnership Units and Assignees, books of account, and records of Partnership proceedings, may be kept on, or be in the form
of, magnetic storage media, micrographic, or any other information storage device, provided that the records so kept are
convertible into clearly legible, written form within a reasonable period of time.
Section 3. Tax Information. Within 90 days after the end of each Fiscal Year of the Partnership, the Partnership shall send to
each Person who was a Record Holder during such fiscal year such tax information as shall be necessary in the preparation of
his federal and state income tax returns.
Section 4. Reports. As soon as practicable after the close of each Fiscal Year, the General Partner shall cause to be prepared
reports containing financial statements of the Partnership for the Fiscal Year, presented in accordance with generally accepted.
accounting principles consistently applied, including a balance sheet, a statement of income, a statement of Partners’ equity,
and a statement of changes in financial position. As soon as practicable after the preparation of each such report, the
Partnership shall cause such report to be printed and mailed to each Record Holder as of the close of the fiscal period with
respect to which such report was prepared.
Section 5. Filing Tax Returns. The General Partner shall cause income tax returns for the Partnership to be prepared and
timely filed with the appropriate authorities.
Section 6. Filing of Other Reports. The General Partner shall cause to be prepared and timely filed with appropriate federal
and state regulatory and administrative bodies all reports required to be filed with such entities under then current applicable
laws, rules, and regulations. Such reports shall be prepared on the accounting or reporting basis required by such entities.
Section 7. Access to Records. The books and records of the Partnership generally shall be open to inspection by any Partner
during business hours upon reasonable notice to the General Partner. Notwithstanding any other provision of this Agreement,
however, the General Partner may, in its sole and absolute discretion, refuse a Limited Partner or its representative access to
any information, records, documents, or data it determines to be confidential or in the nature of trade secrets.
requesting the transfer indicating that i) the recipient of such transfer is indeed a valid family or personal trust, charitable remainder unitrust, or other similar estate planning entity, ii) that the proposed beneficiaries of said trust,
charitable remainder unitrust or other similar estate planning entity is indeed a beneficiary according to said trust,
charitable remainder unitrust or other similar estate planning entity; and iii) the transfer of any Unit or Units held by
the Limited Partner meets the transfer requirements set forth herein.
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ARTICLE XIV
Withdrawal or Removal of General Partner
Section 1. Withdrawal of General Partner. The General Partner may resign at any time after December 31, 2010, provided
however, that 60 days prior to the effective date of the resignation, the General Partner shall nominate one or more substitute
general partner(s) satisfactory to the Limited Partners holding a Majority in Interest. No withdrawal pursuant to this
ARTICLE XIV, Section 1 shall be effective with respect to a General Partner who is the sole General Partner unless and until
such successor shall have been elected and admitted as a General Partner. The successor General Partner shall be admitted to
the Partnership as a general partner upon execution of a counterpart of this Agreement and shall continue the business of the
Partnership without dissolution.
Section 2. Removal of General Partner.
A. The General Partner may be removed as general partner at any time, for any reason, upon the vote of Limited
Partners owning a Majority in Interest. If, the General Partner to be removed is the sole general partner of the
Partnership, any such action by the Limited Partners as must provide for the election of a successor general partner
(which election shall be by a Majority in Interest of the Limited Partners), and shall become effective following the
admission of the successor general partner. The successor general partner shall be admitted to the Partnership upon
execution of a counterpart of this Agreement and shall continue the business of the Partnership without dissolution.
If the General Partner shall have been removed for “cause” (which shall mean that the General Partner has engaged
in actual fraudulent conduct, gross negligence, or willful or wanton misconduct in connection with its activities as
General Partner), the General Partner shall relinquish its entire interest in the Partnership without compensation
therefor.
B. If a General Partner is removed under ARTICLE XIV, Section 2, Paragraph A herein at a time when there is a
remaining General Partner, the remaining General Partner shall continue the business at the Partnership without
dissolution.
C. Written notice of the removal of the General Partner pursuant to this ARTICLE XIV, Section 2 shall be served upon
the General Partner in the manner set forth in ARTICLE XIX herein. Such notice shall set forth the day upon which
such removal is to become effective, which date shall not be less than thirty (30) days after the service of the notice
upon the General Partner.
D. A General Partner removed as a general partner pursuant to this ARTICLE XIV, Section 2 shall not have any right,
authority, or responsibility to participate in the management or affairs of the Partnership upon and after the effective
date of such removal, and upon and after the effective date of such removal, he shall have no further liability as a
general partner of the Partnership except as otherwise required by law.
E. The removal of the General Partner pursuant to ARTICLE XIV, Section 2, Subsection A shall not affect the General
Partner’s or its Affiliates’ rights to receive any amounts then or thereafter payable pursuant to ARTICLE VIII,
Section 1, or ARTICLE VIII, Section 2 of this Agreement. The General Partner shall have, and the Partnership
hereby grants, a lien on and security interest in all assets of the Partnership to secure payment of any amounts then or
thereafter payable to the General Partner or its Affiliates pursuant to ARTICLE VIII, Section 1 or ARTICLE VIII,
Section 2 of this Agreement. The Partners hereby consent to the filing of such financing statements as shall be
necessary to perfect the foregoing lien and security interest.
Section 3. Limitations on Removal of a General Partner and Election of a Successor General Partner. Notwithstanding the
provisions of ARTICLE XIV, Section 2 herein, the rights of the Limited Partners under ARTICLE XIV, Section 2 herein shall
not be exercised until such time as the Partnership shall have received an opinion of independent counsel that the action in
question (i) may be taken without the concurrence of all Partners, (ii) would not cause the loss of limited liability of the
Limited Partners under this Agreement or the Act, and (iii) would not cause the Partnership to be classified as an association
taxable as a corporation for federal income tax purposes.
Section 4. Interest of Departing Partner and Successor.
A. In the event of the withdrawal of the General Partner pursuant to ARTICLE XIV, Section 1 herein or its removal
pursuant to ARTICLE XIV, Section 2, Paragraph A herein, the Departing Partner, at its option, exercisable prior to
the effective date of the withdrawal or removal of such Departing Partner, shall promptly receive from its successor
in exchange for the Departing Partner’s General Partner Interest an amount in cash equal to the fair market value of
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B. If the Departing Partner does not exercise the option described in ARTICLE XIV, Section 4, Subsection A herein,
the Departing Partner shall receive its allocation of Distributions and Profits, if any, payable to the Departing Partner
as of, and only until, the effective date of departure.
C. If the Departing Partner does not exercise the option described in ARTICLE XIV, Section 4, Subsection A herein,
the successor shall, at the effective date of its admission to the Partnership, contribute to the capital of the
Partnership cash in an amount or property having a Carrying Value such that its Capital Account shall equal the
Capital Account of the Departing Partner as of the departure date.
D. If, at the time of the Departing Partner’s departure, the Partnership is indebted to the Departing Partner or any of its
Affiliates under this Agreement or any other instruments of agreement for funds advanced, properties sold, services
rendered, or costs and expenses incurred by the Departing Partner, the Partnership shall, within sixty (60) days after
the effective date of such Departing Partner’s departure, pay to the Departing Partner and such Affiliates the full
amount of such indebtedness, with interest.
Section 5. Liability on Removal or Withdrawal. A General Partner shall be discharged from, and the Partnership or any
Person or Persons continuing the business of the Partnership if it has dissolved shall assume and pay, as they mature, all
Partnership obligations and liabilities (other than nonrecourse obligations) that exist on the date of such Departing Partners
ceasing to be a General Partner of the Partnership and shall hold such Departing Partner harmless from any action or claims
arising or alleged to arise from those obligations and liabilities accruing after such date. The Partnership or any such Person or
Persons continuing the business of the Partnership shall promptly notify all creditors of the Partnership as of that date of (i)
the Departing Partner’s ceasing to be a General Partner, (ii) the discharge of the Departing Partner from all of the
Partnership’s obligations and liabilities, and (iii) the assumption thereof by the Partnership or the Person or Persons
continuing the business of the Partnership. The Partnership or the Person or Persons continuing the business of the Partnership
if the Partnership has dissolved shall use its or their best efforts to procure and execute an agreement from creditors of the
Partnership discharging the Departing Partner from liability to creditors as of the date of its removal or withdrawal.
Section 6. Amendment of Agreement and Certificate of Limited Partnership. This Agreement and the Certificate of Limited
Partnership shall be amended, to the extent necessary, to reflect the withdrawal, removal, or succession of a General Partner
and, if applicable, each General Partner, by execution of this Agreement, appoints each other General Partner and each
successor General Partner as attorney-in-fact for such purpose.
ARTICLE XV
Partnership Funds
Section 1. General. Partnership Funds shall be used by the General Partner only for the business of the Partnership and shall
not be commingled with those of any other Person. Income earned on the Partnership Funds shall inure solely to the benefit of
the Partnership.
Section 2. Partnership Accounts. Subject to the provisions of ARTICLE XVII, Section 2 herein; Partnership Funds shall be
deposited In such bank account or accounts or invested in such interest bearing investments, in the name of the Partnership, as
shall be designated by the General Partner. All withdrawals from any such bank accounts shall be made by the General Partner
or the duly authorized principals therein.
the Departing Partner’s General Partner Interest herein, determined as of the effective date of its departure. If the
option is exercised, the Departing Partner shall, as of the effective date of its departure and payment of such amount,
cease to share in any allocation or distributions with respect to its General Partner Interest. For purposes of this
ARTICLE XIV, Section 4, the fair market value of the Departing Partner’s General Partner Interest herein shall be
determined by agreement between the Departing Partner and its successor or, failing agreement within 30 days after
the effective date of such Departing Partner’s departure, by an independent investment banking firm or other
independent expert selected by the Departing Partner and its successor, which, in turn, may rely on other experts and
the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent
investment banking firm or other independent expert within 45 days after the effective date of such departure, then
such firm shall be designated by the independent investment banking firm or other independent expert selected by
each of the Departing Partners and its successor. In making its determination, such independent investment banking
firm or other independent expert shall consider the value of the Partnership, the rights and obligation of the General
Partner, and such other factors as it may deem relevant.
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ARTICLE XVI
Status and Rights of Limited Partners
Section 1. No Participation In Business. The Limited Partners, as limited partners, shall not participate in the management or
control of the Partnership’s business nor shall they transact any business for the Partnership, nor shall they have the power to
act for or bind the partnership, such powers being vested solely and exclusively in the General Partner. The Limited Partners
shall have no interest in the properties or assets of the General Partner or any partnership interest therein, or in any proceeds
of any sales thereof (which sales shall not be restricted in any respect other than pursuant to ARTICLE XII, Section 2 herein),
by virtue of their acquiring or owning Limited Partnership Units. In the event any laws, rules, or regulations applicable to the
Partnership or to the sale or issuance of Limited Partnership Units in connection with the Private Placement require a Limited
Partner to have certain rights, options, privileges, or consents not granted by the terms of the Agreement, then the Limited
Partners shall have and enjoy such rights, options, privileges, or consents so long as (but only so long as) the existence thereof
does not result in a loss of limitation of liability enjoyed by the Limited Partners under the Act or the applicable laws of any
other jurisdiction.
Section 2. No Personal Liability. Subject to ARTICLE XI, Section 2 herein, no Limited Partner, as a limited partner, shall
have any personal liability whatever, whether to the Partnership, to any of the Partners, or to the creditors of the Partnership,
for the debts of the Partnership or any of its losses beyond (i) the amount of his Capital Contribution, (ii) his share of any
undistributed assets of the Partnership, and (iii) to the extent, and for the period required by applicable law, the amount of his
capital in the Partnership returned to him. On issuance, each Limited Partnership Unit shall be fully paid and non-assessable.
No Limited Partner shall be required to lend any funds to the Partnership or; to make any further contribution to the capital of
the Partnership. It is the intent of the Partners that (i) no Distribution to any Limited Partner (other than a Distribution upon
dissolution of the Partnership) shall be deemed a return or withdrawal of capital, even if such Distribution represents, for
federal income tax purposes or otherwise (in full or in part) a distribution of depreciation or any other non-cash item
accounted for as a loss or deduction from, or offset, the Partnership’s income, and (ii) no Limited Partner shall be obligated to
pay any such amount to or for the account of the Partnership or any creditor of the Partnership. The payment of any
Distribution to a Limited Partner, whether or not deemed a withdrawal of capital, shall not be required to be returned to the
Partnership or any creditor of the Partnership. However, if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Distribution made by the Partnership to a Limited Partner constitutes a return or withdrawal
of capital, any obligation under applicable law to return the same or any portion thereof to or for the account of the
Partnership or it creditors shall be the obligation of such Limited Partner, as the case may be, and not of the General Partner.
Section 3. Incapacity of a Limited Partner. The incapacity of a Limited Partner shall not cause a dissolution of the Partnership,
but the rights and obligations of such Limited Partner to share in the Taxable Income and Taxable Loss of the Partnership, to
receive Distributions, and to assign a Limited Partnership Unit on the happening of such an event shall devolve on his
personal representative, his successor in interest, or, in the event of the death of one whose Limited Partnership Unit is held in
joint tenancy, shall pass to the surviving joint tenant, subject to the terms and conditions of the Agreement, and the
Partnership shall continue as a limited partnership. However, in no event shall such personal representative or successor in
interest of a Limited Partner become a Substituted Limited Partner, except pursuant to ARTICLE XII, Section 3 herein.
Section 4. Voting Rights. Limited Partners (voting as set forth in ARTICLE XVI, Section 6) shall have the right, by the vote
of a Majority in Interest (except where a higher percentage is otherwise specified in the Agreement), to vote only upon the
following matters affecting the basic structure of the Partnership:
A. election of an additional or a successor General Partner as provided in ARTICLE XII, Section 2, ARTICLE XIV,
Section 1, and ARTICLE XIV, Section 2 herein;
B. termination, dissolution, and winding up of the Partnership as provided in ARTICLE XVIII herein;
C. amendment of the Agreement as provided in ARTICLE XX herein;
D. elections of a trustee to liquidate or distribute the Partnership assets upon a dissolution caused by the resignation,
removal, legal disability, dissolution, or bankruptcy of the General Partner;
E. the removal of the General Partner pursuant to ARTICLE XIV, Section 2, Paragraph A herein;
F.
reestablishment upon an event of withdrawal of a General Partner;
G. the sale by the Partnership of substantially all of its assets, and
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Section 5. Meetings; Notice. The General Partner may at any time call a meeting of the Limited Partners for a vote (without a
meeting) of the Limited Partners on matters on which they are entitled to vote, and shall call for such meeting or vote within
thirty (30) days following the receipt of a written request therefor by Limited Partners holding 10% or more of the Limited
Partnership Units. The Record Date for any such vote shall be fixed by the General Partner, or, in the case of a vote or
meeting requested by the Limited Partners, shall be the date of receipt of such written request. The notice of the vote or
meeting sent by the General Partner to Limited Partners as of the Record Date shall specify the time and place of the
Partnership meeting, if called, the general nature of the business to be transacted thereat, or, if no such meeting has been
called, of the matter or matters to be voted upon and the date upon which the votes will be counted, which date in either case
shall not be less than 15 nor more than 60 days after the date the notice is sent. If a meeting is adjourned to another time or
place, and if an announcement of the adjournment of time or place is made at the meeting, it shall not be necessary to give any
notice of the adjourned meeting. The presence in person or by proxy of a Majority in Interest shall constitute a quorum at all
meetings of the Record Holders; provided, however, that if there be no such quorum, holders of a Majority in Interest so
present or so represented may adjourn the meeting from time to time without further notice until a quorum shall have been
obtained. No notice of time, place, or purpose of any meeting of Record Holders need be given to any Record Holders who
attend in person or are represented by proxy, except for Record Holders attending a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business on the ground that the meeting is not lawfully
called or convened, or to any Record Holder entitled to such notice who, in writing executed and filed with records of the
meeting, either before or after the time thereof, waives such notice.
Section 6. Voting Procedures.
A. A Limited Partner shall be entitled to cast one vote for each Limited Partnership Unit that he owns: (i) at a meeting,
in person, by written proxy or by a signed writing directing the manner in which he desires that his vote be cast,
which writing must be received by the General Partner prior to such meeting, or (ii) without a meeting, by a signed
writing directing the manner in which he desires that his vote be cast, which writing must be received by the General
Partner prior to the date upon which the votes of Limited Partners are to be counted. Only the votes of Persons who
are Limited Partners on the Record Date, whether at a meeting or otherwise, shall be counted.
B. The Laws of the State of California pertaining to the validity and use of corporate proxies shall govern the validity
and use of proxies given by Limited Partners. At each meeting of the Limited Partners, the General Partner shall
appoint such officers and adopt such rules for the conduct of such meeting as the General Partner shall deem
appropriate. In connection with each meeting or vote without meeting of the Limited Partners, the Partnership shall
provide for proxies or written consents which specify a choice between approval and disapproval of each matter to
be acted upon at the meeting or by vote without a meeting. For purposes of obtaining a written vote under this
Agreement, the General Partner may require a written response within a specified time, but not less than 15 days nor
more than 60 days after the date the notice is sent by or on behalf of the Partnership.
Section 7. Limitations on Partners. No Partner shall have the right or power to: (i) withdraw or reduce his contribution to the
capital of the Partnership except as a result of the dissolution of the Partnership or as otherwise provided in this Agreement or
by law; (ii) cause the termination and dissolution of the Partnership by court decree or otherwise, except as provided by law or
as set forth in this Agreement; (iii) demand or receive property other than cash in return for his contribution; or (iv) demand or
receive interest on any Capital Contributions to the Partnership. Except as specifically set forth herein, no Limited Partner
shall have priority over any other Limited Partner either as to the return of contributions of capital or as to Taxable Income,
Taxable Loss or Distributions. Other than upon the termination and dissolution of the Partnership. As provided by this
Agreement, there has been no time agreed upon when the contribution of each Partner may be returned.
ARTICLE XVII
Management, Powers, Responsibilities
and Duties of the General Partner
Section 1. Management of the Partnership. The General Partner shall have the full, complete, and exclusive right and
responsibility to manage and control the business and affairs of the Partnership, to make all decisions regarding the business
of the Partnership, to provide executive, Supervisory, employer, and certain administrative services for the Partnership’s
operations, and to exercise all authority granted to the General Partner hereunder. No Limited Partner (with the exception of
the General Partner if it is also a Limited Partner) shall have any right of control or management over the business and affairs
H. those matters set forth in ARTICLE XVII, Section 2 and ARTICLE XVII, Section 3 and ARTICLE XVIII, Section 2
herein requiring the vote of the Limited Partners.
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of the Partnership. The General Partner shall devote such time to the Partnership business as the General Partner, in its sole
discretion, shall deem to be necessary to manage and supervise the Partnership business and affairs in an efficient manner. The
General Partner shall not be required to manage the Partnership on full-time basis or as its sole and exclusive function, and the
General Partner and its Affiliates may have other business interests and engage in other activities in addition to those relating
to the Partnership, including business interests and activities that may be in direct competition with the Partnership. Neither
the Partnership nor any Partner shall have any right by virtue of this Agreement or the partnership relationship created hereby
in or to such other ventures, business interest or activities, including, but not limited to, the business and activities of
SWANsat 1, Inc. or any Affiliate of the General Partner, or to the income or proceeds derived therefrom, and the pursuit of
such ventures, even if competitive with the business of the Partnership, shall not. be deemed wrongful or improper.
Section 2. Rights and Powers. The General Partner shall have all authority, rights, and powers now or hereafter conferred by
law, including all of the rights and powers of a partner in a partnership without limited partners and those required or
appropriate to the management of the Partnership business, which shall be exercised in accordance with the terms of this
Agreement and may be exercised by an attorney-in-fact for the General Partner under a special or limited power of attorney,
and which shall include, but not be limited to, the right, authority, and power to:
A. approve the budget for the Partnership’s share of the costs for the design, construction, insurance, launch and
operation of the SWANsat System, and all costs and other arrangements for the exploitation of the rights to market
the Subscriber Accounts;
B. cause the Partnership to enter into and perform its obligations and enforce its rights under, and amend or modify in
any respect, any agreements to which the Partnership is a party;
C. give releases, make settlements or compromises;
D. operate through wholly-owned corporations or corporate Affiliates of the General Partner or the Partnership or
through other general or limited partnerships owned or controlled by the Partnership;
E. acquire and enter into any contract of insurance which the General Partner deems necessary or appropriate for the
protection of the Partnership or the General Partner or the Affiliates thereof, for the conservation of assets of the
Partnership, or for any purpose convenient or beneficial to the Partnership;
F.
employ persons in the operation and management of the business of the Partnership, including attorneys,
accountants, consultants, and other experts and contractors;
G. execute and deliver checks, drafts, and other instruments and certificates on behalf of the Partnership;
H. sign and deliver any certificate which any Person dealing with the Partnership or the General Partner may rely upon
as authority with respect to: (i) the identity of the General Partner or any Limited Partner, (ii) the existence or nonexistence of any fact which constitutes a condition precedent to acts by the General Partner or is in any other manner
germane to the affairs of the Partnership; (iii) the Persons who are authorized to execute and deliver any instrument
or document of the Partnership, or (iv) any act or failure to act by the Partnership or any other matter whatsoever
involving the Partnership or any Partner;
I.
set aside the Reserve Fund and such other reserves for contingencies out of Available Cash Flow which the General
Partner in its sole and absolute discretion deems reasonably necessary or appropriate for the operation of the
Partnership and to make expenditures deemed necessary by the General Partner for the conduct of activities of the
Partnership;
J.
subject to ARTICLE XV, Section 2 herein, place record title to Partnership assets in the name(s) of the General
Partner(s), nominees or trustees for any purpose convenient and beneficial to the Partnership;
K. cause the Partnership to incur indebtedness for borrowed money to be used to pay expenses of the Partnership, and
to grant liens and security interests. in Partnership assets to secure such indebtedness on such terms as the General
Partner in its judgment determines to be in the best interests of the Partnership;
L. sell, license, convey, or otherwise dispose of interests in the Subscriber Accounts or the rights to market Subscriber
Accounts, or other assets of the Partnership except as a part of a sale or other disposition of all or substantially all.
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M. perform any and all other acts or activities and engage in such activities as are, in the discretion of the General
Partner, necessary, appropriate, desirable, or incident to carrying out the purposes and business of the Partnership;
N. file of record the Certificate of Limited Partnership of the Partnership and amendments thereto in the State of
California and other jurisdictions where the business of the Partnership may be conducted and such filing is required;
and
O. enforce the Partnership’s rights and remedies against third Persons as the General Partner deems appropriate.
Section 3. Limitations. Neither the General Partner nor any of its Affiliates shall have the authority, except as applicable in
accordance with the approval of a Majority in Interest pursuant to ARTICLE XVI, Section 4 herein, to:
A. sell, assign, transfer or otherwise dispose of all or substantially all of the assets of the Partnership in a single
transaction, or in a series of related transactions other than in the ordinary course of business of the Partnership,
except (i) in the liquidation and winding up of the business of the Partnership upon its termination and dissolution, or
(ii) pursuant to ARTICLE XVII, Section 2, Paragraph L herein;
B. materially alter the nature of the business of the Partnership as set forth in ARTICLE III herein;
C. do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business
of the Partnership;
D. extend the term of the Partnership;
E. possess, use, or permit the use of any Partnership asset or assign the rights of the Partnership in any specific
Partnership asset for other than a Partnership purpose;
F.
admit a person as a General Partner except as specifically provided for in this Agreement;
G. cause the Partnership to make any loan to the General Partner or any Affiliate of the General Partner.
Section 4. No Personal Liability. The General Partner shall have no personal liability for the repayment of the Capital
Contribution of any Limited Partner.
Section 5. Accounting Matters. The General Partner shall make all decisions as to accounting matters and shall do so in
accordance with generally accepted accounting principles applied on a consistent basis. The General Partner may rely on the
Partnership’s independent certified public accountants to determine whether such decisions are in accordance with generally
accepted accounting principles. The accountants for the Partnership shall be selected by the General Partner.
Section 6. Tax Matters Partner. The General Partner Is hereby designated as the “Tax Matters Partner” under Section
6231(a)(7) of the Code and is authorized and required to represent the Partnership (at the Partnership’s expense) in connection
with all examinations of the Partnership’s affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and Costs associated therewith. Each Partner agrees to
cooperate with the General Partner and to do or retrain from doing any or all things reasonably required by the General
Partner to conduct such proceedings.
Section 7. Conversion to a Pass-Through Entity or to a Corporation.
A. If, pursuant to federal income tax laws, the Partnership is to be treated as an association taxable as a corporation, the
General Partner may, in compliance with applicable federal and state law, take all necessary action to amend and
reformulate the structure of the Partnership to enable it, if possible, to be classified as a pass-through entity for
federal income tax purposes.
B. If, at any time, the General Partner In its sole judgment, determines that conversion or reorganization of the
Partnership into corporate form would be in the best interests of the Partnership and the Partners, the General
Partner, upon the approval of a Majority in Interest, may, and is hereby authorized to, cause such conversion or
reorganization to take place.
the assets of the Partnership in a transaction requiring the consent of the Limited Partners pursuant to ARTICLE
XVII, Section 3, Paragraph A herein;
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Section 8. “Designated Organizer” and “Designated Person”. The General Partner shall, for tax purposes, be the “designated
organizer” of the Partnership and the “designated person” pursuant to Section 6112 of the Code and the Treasury Regulations
promulgated thereunder for maintaining lists of investors in the Partnership, and shall take such actions as shall be required to
register the Partnership if such registration is required and to maintain lists of Limited Partners.
Section 9. Transactions with General Partner and Affiliates. The validity of any transaction, agreement or payment involving
the Partnership or its business and the General Partner or any Affiliate thereof, otherwise permitted by the terms of this
Agreement shall not be affected by reason of the relationship between the General Partner and such Affiliate or the approval
of said transaction, agreement or payment by the General Partner, all or some of the principals in the General Partner being
officers or directors of or being otherwise interested in or related to its Affiliates. Except as otherwise provided for herein, all
future services, materials and rights furnished by the General Partner or an Affiliate of the General Partner shall be at prices
and upon terms and conditions applicable to bona fide arm’s length agreements in comparable circumstances between the
Partnership and reputable, financially responsible third parties which are not Affiliates of the General Partner.
Section 10. Tax Elections. The General Partner may, in its sole discretion, make or revoke the election referred to in Section
754 of the Code or any similar provision enacted in lieu thereof or any other election under the Code. Each of the Partners will
upon request supply the information necessary to give effect properly to such election.
Section 11. Insurance. The General Partner may cause the Partnership to maintain with reputable insurance companies
appropriate and reasonable insurance relating to the Partnership’s business and activities.
Section 12. Reliance by Third Parties. Notwithstanding any other provision of this Agreement to the contrary, no lender or
purchaser, including any purchaser of property from the Partnership, or any other Person dealing with the Partnership, shall be
required to look to the application of proceeds hereunder or to verify any representation by the General Partner as to the
extent of the interest in the assets of the Partnership that the General Partner is entitled to encumber, sell or otherwise use, and
any such lender or purchaser shall be entitled to rely exclusively on the representations of the General Partner as to its
authority to enter into such financing or sale arrangements and shall be entitled to deal with the General Partner as if it were
the sole party in interest therein, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or
other remedies that may be available against such lender, purchaser or other person to contest, negate or disaffirm any action
of the General Partner in connection with any such sale or financing. In no event shall any Person dealing with the General
Partner or the General Partner’s representative with respect to any business or property of the Partnership be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or the General Partner’s representative; and every contract, agreement, deed, security agreement,
promissory note or other instrument or document executed by the General Partner or the General Partner’s representative with
respect to any business or property of the Partnership shall be conclusive evidence in favor of any and every Person relying
thereon or claiming thereunder that (i) at the time of the execution or delivery thereof, this Agreement was in full force and
effect, (ii) such instrument or document was duly executed in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership and (iii) the General Partner or the General Partner’s representative was duly authorized and
empowered to execute and deliver any and every such instrument or document for and on behalf of the Partnership.
Section 13. Loans from the General Partner. The General Partner or its Affiliates may lend to the Partnership funds needed by
the Partnership for such periods of time as the General Partner may determine, provided, however, that the General Partner or
Affiliate may not charge the Partnership interest at a rate greater than the lesser of (i) the General Partner’s or Affiliate’s
actual average interest cost (including points or other financing charge or fees, if any) or (ii) the rate (including points or other
financing charge or fees, if any) that would be charged the Partnership (without reference to the General Partner’s financial
abilities or guaranties) by unrelated lenders on comparable loans The Partnership shall reimburse the General Partner or its
Affiliate, as the case may be, for any costs incurred by the General Partner or Affiliate and loaned to the Partnership.
Section 14. Indemnification of General Partner. The Partnership shall indemnify and hold harmless the General Partner, and
the principals therein and its and their directors, officers, controlling persons, employees, agents and Affiliates (whether or
not, at the time indemnification is sought, such Person continues to be a General Partner, partner therein, director, officer,
controlling person, agent, employee or Affiliate), as follows:
A. In any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which an Indemnitee was or is a party or is threatened to be made a party by reason of the fact that it
is or was the General Partner, a partner therein, or a director, officer, controlling person, employee, agent or Affiliate
of the General Partner or of a principal therein, involving an alleged cause of action arising out of or incidental to the
Private Placement, the activities of the General Partner under this Agreement, or the management of the affairs of the
Page 19
B. Expenses (including legal fees and related expenses) incurred in defending any proceeding shall be paid by the
Partnership in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of
the Indemnitee to repay such amount if it shall ultimately be determined, by a court of competent jurisdiction, that
the Indemnitee is not entitled to be indemnified by the Partnership as authorized hereunder.
C. Any indemnification under this ARTICLE XVII, Section 14 shall be made only out of the assets of the Partnership.
The Limited Partners and Assignees shall not be subject to personal liability by reason of this ARTICLE XVII,
Section 14.
D. The indemnification provided by this ARTICLE XVII, Section 14 shall be in addition to any other rights to which
those indemnified may be entitled under any agreement, vote of the Partners, as a matter of law or otherwise, both as
to action in the Indemnitee’s capacity as the General Partner, a principal therein, or as a director, officer, controlling
person, employee, agent, or Affiliate of the General Partner or a partner therein, and as to action In another capacity,
shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefits of the
heirs, successors, assigns, and administrators of the Indemnitee.
E. An Indemnitee shall not be denied indemnification, in whole or in part, under this ARTICLE XVII, Section 14
because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
F.
The provisions of this ARTICLE XVII, Section 14 are for the benefit of the Indemnitee and shall not be deemed to
create any rights for the benefit of any other Persons.
Section 15. Liability of the General Partner. Neither the General Partner nor the directors, officers, controlling persons,
employees, agents or Affiliates of the General Partner shall be liable to the Partnership, any Limited Partner, or other Persons
who have acquired interests in the Limited Partnership Units, whether as Assignee or otherwise, for errors in judgment or for
any acts or omissions that do not constitute actual fraud, gross negligence, or willful or wanton misconduct.
Section 16. Other Matters Concerning the General Partner.
A. The General Partner may rely and shall be protected in acting or refraining from acting, upon any resolution,
certificate, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document
believed by It to be genuine and to have been signed or presented by the proper party or parties.
B. The General Partner may execute any of its powers or perform any of its duties, either directly or by or through
agents, including without limitation, any Affiliate. The General Partner may consult with counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and advisors selected by it (who may
serve as such for the Partnership or any Affiliate), and any opinion of such Person as to matters which the General
Partner believes to be within its profession or expert competence shall be full and complete authorization and
protection in respect to any action taken or suffered or omitted by the General Partner hereunder in good faith and in
accordance with such opinion. The General Partner shall not be responsible for the misconduct, negligence, or acts
or omissions of any such Person and shall assume no obligations in connection therewith.
Partnership or which relates to the Partnership, its property, business or affairs, the Partnership shall indemnify such
Indemnitee against expenses, including attorneys’ fees, judgments, fines, amounts paid in settlement and liabilities
under federal and state securities laws, actually and reasonably incurred by such Indemnitee in connection with such
action, suit or proceeding, provided that such Indemnitee acted in good faith within the scope of its authority and in a
manner it believed to be in or not opposed to the best interest of the Partnership and provided that the Indemnitee’s
conduct does not constitute actual fraud, bad faith, a willful breach of its fiduciary duty to the Limited Partners, a
failure to comply in any material respect with the Partnership Agreement, gross negligence or willful or wanton
misconduct (unless and only to the extent that the court in which such action, suit or proceeding was brought shall
determine upon application that, despite the adjudication of liability but in view of all circumstances of the case such
Indemnitee is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper) and,
with respect to any criminal proceeding, the Indemnitee had no reasonable cause to believe its conduct was unlawful.
The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere, or
its equivalent, shall not, of itself, create a presumption that an Indemnitee did not act in good faith and in a manner
that it reasonably believed to be in, or not opposed to, the best interest of the Partnership.
Page 20
C. Any and all fees, commissions, compensation, and other consideration received by the General Partner, or any
partner therein, or a director, officer, controlling person, agent, employee of the General Partner or any partner
therein, permitted hereunder shall be the exclusive property of the recipient, in which the Partnership shall have no
right or claim, and the participation by such Person in any agreement permitted hereunder shall not constitute a
breach by such Person of any duty that it may owe the Partnership or the Limited Partners under this Agreement or
by operation of the law.
ARTICLE XVIII
Dissolution of the Partnership
Section 1. Events of Dissolution. The happening of any of the following events shall work an immediate dissolution of the
Partnership:
A. The bankruptcy, dissolution, termination, death, legal disability, or other withdrawal or removal of a General
Partner, unless such event occurs pursuant to ARTICLE XII, Section 2, Paragraph B herein or unless the business of
the Partnership is continued pursuant to ARTICLE XII, Section 2, Paragraph C and ARTICLE XIV, Section 2,
Paragraph A and ARTICLE XIV, Section 2, Paragraph B herein, or unless within ninety (90) days following the date
of bankruptcy, dissolution, termination or other withdrawal or removal, a substitute or successor General Partner is
elected by the unanimous written approval of all then remaining Partners;
B. The sale or other disposition by the Partnership of all or substantially all of its assets in a single transaction or in a
series of related transactions and receipt of full payment therefor;
C. The decision by the General Partner and a Majority in Interest to dissolve the Partnership;
D. The expiration of the term of the Partnership as provided in ARTICLE V of this Agreement;
E. The election by the General Partner (after consulting with Partnership counsel), without the consent of any Limited
Partner pursuant to ARTICLE XX, Section 2, Paragraph E herein; .
F.
By order by a court with jurisdiction or any recognized process; and
G. Any other event which causes a termination of the Partnership under the Act.
Section 2. Procedure.
A. In the event of the bankruptcy, dissolution, termination, death, legal disability or other withdrawal or removal of a
General Partner, a duly appointed General Partner may continue the Partnership pursuant to the Partnership
Agreement. It the General Partner fails to do so, all the remaining Partners may unanimously agree in writing within
90 days of the event to continue the business of the Partnership and to the appointment of one or more successor
General Partner(s).
B. In the event of the dissolution of the Partnership for any reason other than the reasons set forth ARTICLE XVIII,
Section 2, Paragraph A or, if none of the options in ARTICLE XVIII, Section 2, Paragraph A are chosen, the
General Partner (or, if there is no General Partner remaining, a liquidating trustee selected by a Majority in Interest)
shall commence to wind up the affairs of the Partnership and to liquidate its assets. The Partners shall continue to
share income, gain, loss, deduction, credits, and Distributions during the period of liquidation in the same proportion
as before the dissolution. The General Partner or liquidating trustee shall have full right and unlimited discretion to
determine the time, manner, and terms of any sale or sales of Partnership assets and properties pursuant to such
liquidation having due regard to the activity and condition of the relevant market and general financial and economic
conditions and consistent with the interest of the Partnership in obtaining the fair price thereof.
C. Notwithstanding anything in this Agreement to the contrary, the General Partner or any Affiliate thereof is hereby
granted the option, exercisable by the General Partner (or if there is no General Partner, any Affiliate or Affiliates of
the former General Partner to be allocated among such Affiliates as they shall determine among themselves), to
purchase:
(1) all or substantially all the assets of the Partnership upon liquidation at the greater of the highest bona fide
independent offer received or, if no such offer is received, the fair market value thereof, as determined by an
Page 21
(2) all of the Limited Partnership Units of the Limited Partners for which the consideration shall be paid directly to
the Limited Partners and not to the Partnership.
D. The price and terms for the purchase pursuant to ARTICLE XVIII, Section 2, Paragraph C, Subparagraph (2) shall
be the same as they would have been if the option pursuant to ARTICLE XVIII, Section 2, Paragraph C,
Subparagraph (1) above had been exercised, except that the purchase price shall be reduced by the amount of cash
that would have been distributable to the General Partner by the Partnership if the option pursuant to ARTICLE
XVIII, Section 2, Paragraph C, Subparagraph (1) had been exercised and the purchase price shall take into account
all the assets of the Partnership. If the General Partner or its Affiliates elects to exercise either option, at least 15
days advance notice of the proposed sale shall be given by publication in a newspaper of general circulation in Los
Angeles, California, and such notice shall specify which option is being exercised.
Section 3. Payment of Liabilities. The proceeds from the sale of the assets of the Partnership in liquidation shall be applied in
the following order of priority: (i) all debts and liabilities of the Partnership all in the priority set forth in ARTICLE VIII,
Section 2 herein and all expenses of liquidation, shall first be paid and (ii) thereafter, the General Partner shall establish such
cash reserves as it may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the
Partnership.
Section 4. Balance of Dissolution Proceeds. The proceeds of liquidation following the application of funds as provided in
ARTICLE XVIII, Section 3 herein and any other funds of the Partnership shall be distributed to the Partners and Record
Holders in the following order:
A. First, in the same order of priority as for Gross Receipts, to the extent allocations of Gross Receipts have not already
been paid;
B. Second, to the Limited Partners in proportion to and to the extent of the positive balance in their Capital Accounts;
and
C. Third, to the Partners in the same ratio as Profits.
Section 5. Report on Dissolution. Within a reasonable time following the completion of the liquidation of the Partnership’s
assets and properties, the General Partner shall prepare a statement audited by the Partnership’s independent accountants
which shall set forth the assets and the liabilities of the Partnership as of the date of complete liquidation, each Limited
Partner’s pro rata portion of the distribution in liquidation, and the amount paid to the General Partner.
Section 6. No Liability of the General Partner. Each Limited Partner shall look solely to the assets of the Partnership for all
Distributions with respect to the Partnership and his Capital Contribution and share of Taxable Income or Taxable Loss, and
shall have no recourse therefor (upon dissolution or otherwise) against the General Partner, or any other Limited Partner. The
Record Holders shall not have the right to demand the receipt of property other than cash upon dissolution and termination of
the Partnership.
Section 7. Termination. Upon the completion of the liquidation of the Partnership and the distribution of all Partnership Funds
and other assets of the Partnership, the Partnership shall terminate and the General Partner shall have the authority to execute
and record a Certificate of Cancellation of the Partnership in accordance with the Act as well as any and all other documents
required to effectuate the dissolution and termination of the Partnership.
Section 8. Goodwill. At no time during the continuation of the Partnership shall any value be placed upon the Partnership
name, or the right to its use, or upon the goodwill pertaining to the Partnership or its business either as between the Partners or
for the purpose of determining any distributive interest of any Partner, and the legal representatives of a Partner shall have no
right to claim any such value. In the event of a termination and dissolution of the Partnership, neither the Partnership name,
nor the right to its use, nor the goodwill of the Partnership, if any, shall be considered to be an asset of the Partnership. No
value shall be put on the Partnership name for the purpose of liquidation or distribution, or for any other purpose, and no
value shall be placed on the Partnership name or goodwill as between the remaining or surviving Partners and the legal
representatives of the estate of any deceased or insolvent Partner.
independent appraiser selected by the General Partner (or if there is no General Partner, by the liquidating
trustee); or
Page 22
ARTICLE XIX
Notices
All notices and demand; required or permitted under this Agreement shall be deemed duly given if in writing and personally
delivered or sent by certified or registered mail, postage prepaid, to the Partners at their addresses as shown from time to time
on the records of the Partnership. Reports and Distributions in the ordinary course of the Partnership’s business may be sent
by regular first-class mail, postage prepaid, to such addresses. Any Partner may specify a different address by notifying the
General Partner in writing of such different address.
ARTICLE XX
Amendment of Limited Partnership Agreement
Section 1. Approval of Amendments. Subject to ARTICLE XX, Section 3 herein and except as otherwise set forth in
ARTICLE XX, Section 2 herein or as required by law, all provisions of this Agreement may be amended in any respect upon
an affirmative vote of a Majority in Interest, but in addition to such affirmative vote, amendments shall require the approval of
the General Partner.
Section 2. Amendments Not Requiring Limited Partners’ Consent.
A. to add to the representations, duties or obligations of the General Partner or its Affiliates, or surrender any right or
power granted to the General Partner or its Affiliates herein, for the benefit of the Limited Partners.
B. to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provision with respect to matters or questions arising under this Agreement
which will not be inconsistent with the provisions herein,
C. on or before the initial Closing Date, to delete or add any provision to this Agreement required to be so deleted or
added by the staff of the SEC or by any state “Blue Sky” commissioner or similar official, which addition or deletion
is deemed by such staff or official to be for the benefit or protection of the Limited Partners;
D. to make all filings as may be necessary or proper to provide that this Agreement shall constitute, for all purposes, an
agreement of limited partnership under the laws of the State of California as in effect from time to time and to reflect
transfers of Units or to form, qualify, or continue the Partnership as a limited partnership (or a partnership in which
the Limited Partners have limited liability) in all jurisdictions in which the Partnership conducts or plans to conduct
business;
E. upon notice to all Partners, to take such steps as the General Partner determines are advisable or necessary in order
to preserve the tax status of the Partnership as an entity which is not taxable as a corporation for federal income tax
purposes.
F.
in accordance with any other provision of this Agreement giving the General Partner the authority to amend this
Agreement without the consent of any other Partner.
Section 3. Limitations on Amendments. Notwithstanding anything to the contrary contained in this Agreement, this Agreement
shall not be amended without the consent of the Partners to be adversely affected by such amendment, if such amendment
would (i) convert a Partner into a General Partner, (ii) modify the limited liability of a Partner which has limited liability prior
to such amendment or increase his obligation to contribute capital to the Partnership; (iii) except as set forth in ARTICLE
XVII, Section 7, Paragraph B herein, affect the status of the Partnership as a partnership for federal income tax purposes.
Section 4. Amendments to Certificate of Limited Partnership. In the event this Agreement shall be. amended pursuant to this
ARTICLE XX, the General Partner shall amend the Certificate of Limited Partnership to reflect such change if it deems such
amendment of the Certificate of Limited Partnership to be necessary or appropriate. The General Partner may amend the
Certificate of Limited Partnership to reflect the reduction of Capital Accounts upon the return of capital to Partners. The
General Partner shall not be required to send to each Partner a copy of each amendment to the Certificate of Limited
Partnership.
Page 23
Section 1. Appointment of General Partner. Each Limited Partner (including each Substituted Limited Partner) and each
Assignee (in each case jointly and severally if more than one), upon execution of a Subscription Agreement, hereby
irrevocably appoints and empowers the General Partner and each of the duly authorized partners therein, officers of the
partners therein, agents, successors and assignees of the General Partner and the attorney-in-fact, in his name, place and stead,
to sign, execute, certify, acknowledge and swear to all instruments and, deliver, record and file all documents requisite to
carrying out the intention and purpose of this Agreement, including, without limitation, the following:
A. any and all amendments or restatements to this Agreement and the Certificate of Limited Partnership that may be
required by this Agreement or the laws of California including, without limitation, amendments required to effect
transfers of Units or the admission or substitution of Partners;
B. any certificate of dissolution or cancellation of this Agreement and the Certificate of Limited Partnership that may be
necessary upon the termination of the Partnership;
C. any and all amendments to this Agreement and the Certificate of Limited Partnership necessary to reflect any
amendments to this Agreement adopted pursuant to ARTICLE XX herein;
D. any business certificate, this Agreement and the Certificate of Limited Partnership, any amendment thereto, or other
instrument or document of any kind necessary to accomplish the business purposes and objectives of the Partnership
or which the General Partner deems appropriate to qualify or continue the Partnership as a limited partnership in the
State of California and all other jurisdictions in which the Partnership conducts or plans to conduct business; and
E. all other instruments that may be required or permitted by law to be filed on behalf of the Partnership and that are not
inconsistent with this Agreement.
Section 2. Coupled With An Interest. The appointment by each Limited Partner (including each Substitute a Limited Partner),
and each Assignee with full power of substitution, as attorneys-in-fact shall be irrevocable, shall survive and be deemed to be
a power coupled with an interest in recognition of the fact that each of the Limited Partners, Assignees, and the General
Partner will be relying upon the power of the General Partner and such officers and others to act as contemplated by this
Agreement in such filing and other action by them on behalf of the Partnership. The foregoing power of attorney shall survive
the assignment by any Limited Partner or Assignee or of the whole or any part of his interest hereunder and shall survive and
shall not be affected by the death, dissolution, bankruptcy, incompetence or legal disability or incapacity of any Limited
Partner or Assignee and shall extend to the heirs, successors and assigns of the Persons granting such power and may be
exercised by said attorney-in-fact acting for all (or any) of the Persons granting such power required to execute any
instrument, and executing such instrument with the single signature of such attorney-in-fact acting for all (or any one) of them
whose names are so listed, or in such other manner, including facsimile signature, as said attorney-in-fact may deem
appropriate.
ARTICLE XXII
Miscellaneous
Section 1. No Exercise of Powers. Notwithstanding any other provisions of this Agreement, the powers provided to the
Limited Partners under this Agreement to vote on any matter herein shall be null and void ab initio and of no effect or
existence and shall not be exercisable if (i) a court of competent jurisdiction determines that the existence or exercise of
similar powers is contrary to the provision of the Act or a comparable statute, or (ii) the Partnership receives an opinion of
counsel (obtained by the General Partner or from counsel appointed by a Majority in Interest) that exercise of such powers
would adversely affect the status of such holders as limited partners, including their limited liability.
Section 2. No Partition. The Partners agree that the Partnership properties are not and will not be suitable for partition.
Accordingly, except pursuant to ARTICLE XVIII, Section 2 herein with respect solely to the General Partner, each of the
Partners hereby irrevocably waives any and all rights that he may have to maintain any action for partition of any of the
Partnership property, which waiver shall survive the dissolution and termination of the Partnership.
Section 3. Entire Agreement. This Agreement constitutes the entire agreement among the parties and it supersedes any prior
agreement or understandings among them except for the Subscription Agreement, and it may not be modified or amended in
any manner other than as set forth herein.
ARTICLE XXI
Power of Attorney
Page 24
Section 4. Governing Law. This Agreement and the rights of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the State of California.
Section 5. Binding Effect. Except as herein otherwise specifically provided, this Agreement shall be binding upon and inure to
the benefit of the Partners and their legal representatives, heirs, administrators, executors, successors and assigns.
Section 6. Pronouns and Plurals. Wherever from the context it appears appropriate, each term stated in either the singular or
the plural shall include the singular and the plural, and pronouns stated in either the masculine, the feminine or the neuter
gender shall include the masculine, feminine and neuter.
Section 7. Captions. Captions contained In this Agreement are inserted only as a matter of convenience and in no way define,
limit or extend the scope or intent of this Agreement or any provision herein.
Section 8. Invalidity of Provisions. If any provision of this Agreement, or the application of such provision to any person or
circumstance, shall be held invalid, illegal or unenforceable, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those to which it is held invalid, illegal or unenforceable shall not be affected
thereby.
Section 9. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument. In addition, this Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the affixing of the signatures of each of the Partners
to one of such counterpart signature pages; all of such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had sighed a single signature page.
Section 10. Force Majeure. Where any period of time specified in this Agreement cannot be met by reason of an act of force
majeure, the time for performance shall be extended during the time of such force majeure.
Section 11. Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of
the Partnership. No creditor who makes a nonrecourse loan to the Partnership shall have or acquire, as a consequence of
making such loan, any direct or indirect interest in the profits, capital or property of the Partnership other than as a secured
creditor of the Partnership.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of this __ day of _____________, ____.
For the General Partner:
Limited Partner:
SWANsat 1, Inc.
(printed name of Limited Partner)
by:
Manager
Section 1. Pursuant to the terms of the offer contained in the CONFIDENTIAL PRIVATE OFFERING MEMORANDUM
(said Memorandum, including the exhibits and attachments thereto, being hereinafter called the “Memorandum”) dated May
15, 2004 of SWANsat Territory 1, Ltd., a California limited partnership (the “Company”), the Undersigned hereby tenders
this subscription and applies for the purchase of ________ Units at a purchase price of $10,000 per Unit. Together with this
Subscription Agreement, the Undersigned is delivering to the Company, by check or money order made payable to SWANsat
Territory 1, Ltd., the purchase price for the shares requested.
Section 2. In order to induce the Company to accept this subscription, the Undersigned hereby represents and warrants to, and
covenants with, the Company as follows:
A. The Undersigned has received and carefully reviewed the Memorandum,
B. The Undersigned has had a reasonable opportunity to ask questions of and receive answers from the General
Partner of the Company concerning the Company and the offering, and all such questions, if any, have been
answered to the full satisfaction of the Undersigned;
C. The Undersigned has such knowledge and expertise in financial and business matters that the Undersigned is
capable of evaluating the merits and risks involved in an investment in the Units;
D. The Investor Representation Letter being delivered by it to the Company simultaneously herewith is true,
complete and correct in all material respects, and the Undersigned understands that the Company has
determined the exemption from the registration provisions of the Securities Act of 1933, as amended (the
“Act”), which is based upon nonpublic offerings, are applicable to the offer and sale of the Units; the
Company’s determination is based, in part, upon the representations, warranties and agreements made by the
Undersigned herein and in the Investor Representation Letter;
E. Except as set forth in the Memorandum, no representations or warranties have been made to the Undersigned by
the Company or any agent, employee or Affiliate of the Company and in entering into this transaction, the
Undersigned is not relying upon any information other that contained in the Memorandum and the results of
independent investigation by the Undersigned;
F.
The Undersigned represents that he/she has attained the age of 21 years.
G. The Undersigned acknowledges that he recognizes the highly speculative nature of this investment and is able to
bear the economic risk he hereby assumes.
H. The Undersigned understands that
(1) the Units have not been registered under the Act or the securities laws of any state, based upon an
exemption from such registration requirements for non-public offerings to “accredited investors” and to no
more than thirty-five (35) qualifying non-accredited investors;
(2) the Units are “restricted securities,” as said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Act;
(3) the Units may not be sold or otherwise transferred unless they have been first registered under the Act and
all applicable state securities laws, or unless exemptions from such registration provisions are available
with respect to said resale or transfer;
(4) other than as set forth in the Memorandum, the Company is under no obligation to register the Units under
the Act or any state securities laws, or to take any action to make any exemption from any such registration
provisions available; and
(5) the Limited Partnership’s certificates for the Units will bear a legend to the effect that the transfer of the
same represented thereby is subject to the provisions herein.
I.
The Undersigned is acquiring the Units solely for the account of the Undersigned, for investment purposes only,
and not with a view towards the resale or distribution thereof.
Subscription Agreement
Page 2
Subscription Agreement— SWANsat Territory 1, Ltd.
J.
The Undersigned will not sell or otherwise transfer any of the Units or any interest therein, unless and until (i)
said Units shall have first been registered under the Act and all applicable state securities laws; or (ii) the
Undersigned shall have first delivered to the Company a written opinion of counsel (which counsel and opinion
[in form and substance] shall be reasonably satisfactory to the Company), to the effect that the proposed sale or
transfer is exempt from the registration provisions of the Act and all applicable state securities laws; and
K. The Undersigned has full power and authority to execute and deliver this Subscription Agreement and to
perform the obligations of the Undersigned hereunder; and this Subscription Agreement is a legally binding
obligation of the Undersigned in accordance with its terms.
Section 3. The Undersigned understands that the General Partner of the Company may, in its sole discretion, reject this
subscription and, in the event that the offering to which the Memorandum relates is oversubscribed, to reduce this
subscription in any amount and to any extent, whether or not pro rata reductions are made to any other investor’s
subscription.
Section 4. The Undersigned agrees to indemnify the Company and hold it harmless from and against any and all losses,
damages, liabilities, costs, and expenses which it may sustain or incur in connection with the breach by the Undersigned of
any representation, warranty, or covenant made by it herein.
Section 5. Neither this Subscription Agreement nor any of the rights of the Undersigned hereunder may be transferred or
assigned by the Undersigned.
Section 6. This Subscription Agreement
A. may only be modified by a written instrument executed by the Undersigned and the Company;
B. sets forth the entire agreement of the Undersigned and the Company with respect to the subject matter herein;
C. shall be governed by the laws of the State of California applicable to contracts made and to be wholly
performed therein; and
D. shall inure to the benefit of, and be binding upon the Company and the Undersigned and its respective heirs,
legal representatives, successors and assigns.
Section 7. The Undersigned
A. agrees that any legal suit, action, or proceeding arising out of or relating to this Subscription Agreement shall be
instituted exclusively in Los Angeles County, California,
B. waives any objection which the Undersigned may have now or hereafter to the venue of any such suit, action, or
proceeding,
C. irrevocably consents to the jurisdiction of the Circuit or County Court in and for Los Angeles County, California
and the United States District Court for the Southern District of California in any such suit, action, or
proceeding,
D. agrees to accept and acknowledge service of any and all process which may be served in any such suit, action,
or proceeding, and
E. agrees that service of process upon the Undersigned mailed by certified mail to the Undersigned’s address shall
be deemed in every respect effective service of process upon the Undersigned, in any suit, action, or proceeding.
Section 8. Unless the context otherwise requires, all personal pronouns used in this Subscription Agreement, whether in the
masculine, feminine, or neuter gender, shall include all other genders.
Section 9. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed by certified or registered mail, return receipt requested, postage prepaid, as follows: if to the
Undersigned, to the address set forth below; and if to the Company, to SWANsat Territory 1, Ltd., c/o Charles Welty, 215 E.
Orangethorpe Avenue, #300, Fullerton, CA 92832-3017, or to such other address as the Company or the Undersigned shall
have designated to the other by like notice.
Subscription Agreement— SWANsat Territory 1, Ltd.
Page 3
For the General Partner:
Subscriber:
SWANsat 1, Inc.
(Printed Name of Subscriber)
by:
(Signature of Subscriber)
Manager
INVESTOR INFORMATION
Please print information below exactly as you wish it to appear in the records of the Company.
(Social Security Number or Taxpayer ID Number for U.S. citizens is
required.)
Address:
Address for notices (if different):
(Number and Street)
(Number and Street)
(City)
(State)
(ZIP Code)
(City)
(State)
(ZIP Code)
IN WITNESS WHEREOF, the Undersigned have executed this Agreement as of this ___ day of ______________, ______.
I, the Undersigned, in connection with my purchase of __________ Units in SWANsat Territory 1, Ltd., hereby make the
following representations:
A. I am a suitable purchaser of these Units under the California limited offering exemption because (check all
applicable blocks):
¨ 1. I am a director or executive officer of the Partnership;
¨ 2. I have a pre-existing personal and/or business relationship with the General Partner consisting of
personal or business contacts of a nature and duration which enables me to be aware of the character,
business acumen and general business and financial circumstances of the person with whom such
relationship exists.
¨ 3. I have the capacity to protect my own interests in connection with my purchase of the above
Partnership Units by reason of my own business and/or financial experience.
¨ 4. I meet one of the net worth or individual income requirements listed below:
i.
I am a natural person whose individual net worth, or joint net worth with my spouse, at the
time of this purchase exceeds $1,000,000;
ii.
I am a natural person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with my spouse in excess of $300,000 in each of those
years and I have a reasonable expectation of reaching the same income level in the current
year.
¨ 5. I have the capacity to protect my own interests in connection with my purchase of Partnership Units
by reason of consultations with a professional financial advisor who has agreed to be my designated
purchaser representative in connection with this transaction (a letter of representation from the
professional advisor is required in this case).
¨ 6. I am the spouse, relative, or relative of the spouse of another purchaser of Units and I have the same
principal residence as this purchaser.
B. I represent that I am purchasing these Units for investment for my own account and not with a view to, or for,
sale in connection with any distribution of the Units. I understand that these Units have not been qualified or
registered under any state or federal securities laws and that they may not be transferred or otherwise disposed
of without such qualification or registration pursuant to such laws or an opinion of legal counsel satisfactory to
the Partnership that such qualification or registration is not required.
C. I have not received any advertisement or general solicitation with respect to the sale of the Units in the above
named Partnership.
D. I represent that, before signing this document, I have been provided access to, or been given, all material facts
relevant to the purchase of my Units, including all financial and written information about the Partnership and
the terms and conditions of the offering of those Units, and that I have been given the opportunity to ask
questions and receive answers concerning any additional terms and conditions of the offering of these Units or
other information which I, or my professional advisor if I have designated one, felt necessary to protect my
interests in connection with the purchase of Partnership Units.
(Date)
(Signature of Subscriber)
(Typed or Printed Name)
Investor Representation Letter
Page 2
Investor Representation Letter and Purchaser Questionnaire—SWANsat Territory 1, Ltd.
PURCHASER QUESTIONNAIRE
This Questionnaire must be completed by each Purchaser who proposes to invest, directly or indirectly, in the Units.
If the case of trusts, corporations, partnership and estates, this Questionnaire must be completed in full by the trustee, officer,
general partner, or executors, respectively, responsible for the Purchaser’s decision to purchase the Units. In the case of a
custodian or other administrative agent, this questionnaire may be completed by such agent, but should contain information
regarding the investor, and should not be limited to information about the investor’s account with the custodian.
The Purchaser agrees and understands that this Questionnaire is merely a request for information. The Purchaser understands
that this Questionnaire is not an offer to sell Units, nor is it a sale of Units, and that no sale will occur prior to the acceptance
of my Subscription by the General Partner. Further, the Purchaser understands that all information contained in this
Questionnaire will be treated confidentially. The Purchase agrees that the General Partner may present this Questionnaire to
such parties as the General Partner deems appropriate if the General Partner is called upon to establish that the proposed Offer
and sale of the Units is exempt from registration under the Act or meets the requirements of applicable state securities laws.
Instructions
All investors must complete sections one, two and three and sign the last page. Please provide the information for all of the
parties if ownership is other than individual (i.e., joint tenants, tenants in common, community property held in two names,
etc.). Corporations or other entities may qualify as an accredited investor if they meet the tests set forth for such entities in
item 4 or 5 of section two. If you are completing this Questionnaire in connection with an investment by an entity, you should
complete “Exhibit A” for each equity owner of the entity.
PLEASE PRINT OR TYPE. ATTACH ADDITIONAL INFORMATION ON A SEPARATE SHEET IF NECESSARY.
Section One
BIOGRAPHICAL INFORMATION
1. Name of Purchaser: ________________________________________________________________________
2. I learned of this investment opportunity from: c SWANsat Marketing c other _______________________.
3. Age: __________
4. Marital Status: c single c married c legally separated c divorced c widowed
5. Principal residence address and telephone number: _______________________________________________
____________________________________________________________________________________________
6. I have adequate means of providing for my current needs and personal contingencies. I have no need for liquidity in
my investment, and I am able to bear the economic risk of an investment in the Units in the amount that I am intending to
purchase. In making this statement, I have given all due consideration as to whether I can afford a complete loss of my
investment. Please initial Item 6 here: __________
7. I hereby certify that I am not a student, nor am I a member of the Armed Forces of the United States.
Please initial Item 7 here: __________
8. Please send all correspondence to (check one only): c Home c Business c other
9. Formal education (highest level): ___________________________________
____________________________________________________________________________________________
School Location
Degree
Year Received
10. Investment seminars or courses attended, if any:
____________________________________________________________________________________________
Course
Date
Page 3
____________________________________________________________________________________________
12. Have you ever invested in any public or private offerings? c No c Yes
If YES, please provide the following information:
c Energy (public)
c Energy (private)
c Real estate (private)
c Commodities
c Research and Development
c Motion Pictures
c Telecommunications
c Other (specify) ____________________________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
13. Have you ever invested in any investments or any securities other than those listed above? c No c Yes
If YES, please provide the following information:
c Commercial paper
c Tax Exempt Bonds
c Money Market or Cash Certificates
c Publicly Traded Stocks
c Cash Accounts
c Foreign Currency Trading
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Amount invested: ______________________
Section Two
ACCREDITED INVESTORS OR QUALIFIED PURCHASERS
I am an accredited investor or qualified Purchaser pursuant to the Item(s) checked below.
c Item 1
c Item 2
c Item 3
c Item 4
c Item 5
— FOR INDIVIDUALS —
Item 1: I certify that I am an accredited investor because I had individual gross income (exclusive of the income of my
spouse) of more than $200,000 in each of the most recent two years and I reasonably expect to have an individual income in
excess of $200,000 for the current year; or that together with my spouse, we earn in excess of $300,000.
For the purpose of the Questionnaire, “individual income” means adjusted gross income, as reported for Federal income tax
purposes, less an income attributable to a spouse, increased by the following amounts (but not including any amounts
attributable to a spouse or to property owned by a spouse):
A.
B.
C.
D.
E.
F.
the amount of any tax exempt interest income received;
the amount of any losses claimed as a partner in partnership;
any deductions claimed for depletion;
amounts contributed to an IRA or Keogh retirement plan;
alimony paid; and
any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross
income pursuant to the provisions of Section 1202 of the Internal Revenue Code of 1954, as amended, or:
Item 2: I certify that I am an accredited investor because I have an individual net worth, or my spouse and I have a combined
individual net worth, in excess of $1,000,000. For purposes of this Questionnaire, “individual net worth” means the excess of
total assets at fair market value, including home and personal property, over total liabilities; or
Item 3: I certify that I am an accredited investor because I am a director or executive officer of the company offering the
securities.
— FOR PARTNERSHIPS, CORPORATIONS AND OTHER ENTITIES —
11. Professional Licenses or Registrations
Page 4
Item 4: On behalf of the investor, I do hereby certify that it has a net worth in excess of five times the amount subscribed and
the investor was not formed for the specific purpose of investing in the Units. As used in the foregoing sentence, “net worth”
means the excess of total tangible assets at Current Market Value less total liabilities, except when noted otherwise above. For
purpose of this provision only, general partnerships may aggregate the net worth of their limited partners to quality as an
accredited investor.
Item 5: The investor hereby certifies that all of the equity owners of the investor are accredited individual investors as defined
in Item 1, Item 2 or Item 3.
Section Two
MISCELLANEOUS
I understand that the General Partner will be relying on the accuracy and completeness of my responses to the foregoing
questions, and I warrant and represent to the General Partner as follows:
1. The answers to the above Questionnaire are complete and correct and may be relied upon by the General
Partner in determining whether the Offering in connection with which I have executed this Questionnaire is
exempt from registration under the Securities Act of 1933, as amended, and the rules promulgated thereunder,
or otherwise.
2. If I purchase any of the Units, my purchase will be solely for my account and not for the account of another
person or with the view to, or for, any resale, fractionalization, division or distribution of all or any part of the
Units purchased.
3. I have adequate means of providing for my current needs and personal contingencies, have no need for
liquidity in my investment, and am able to bear the economic risk of any investment in the Units of the size
contemplated. In making this statement, consideration has been given to whether I can afford a complete loss.
4. I either have the requisite knowledge or have relied upon the advice of my own counsel, accountants, or
business advisors as to all considerations involved in making an investment in th Units.
5. I will notify the General Partner immediately of any material change in any statement made herein
occurring prior to the acceptance of my Subscription by the General Partner.
AGREED TO BY:
_______________________________________________________
Prospective Purchaser Signature #1
Dated: ________________
_______________________________________________________
Prospective Purchaser Signature #2
Dated: ________________
SUBSCRIPTION ACCEPTED AS OF THIS DATE: ___________________________
SWANsat Territory 1, Ltd.
By: ________________________________________________________
Return to: SWANSAT TERRITORY 1, LTD.
c/o 215 E. ORANGETHORPE AVENUE, #300
FULLERTON, CA 92832-3017
tel: 714-738-1938 fax: 831-417-5270
e-mail: [email protected].
APPENDIX THREE:
SWANSAT MARKETING OVERVIEW
1
.
M ARKETING P LAN
SWANSAT® — THE SUPER-WIDE AREA NETWORK®
Copy Number: ______
Current as of Friday, May 14, 2004 at 11:25 AM
This document contains confidential and proprietary information belonging exclusively to
SWANsat Marketing and/or to Leading Edge Technologies, Ltd., and/or to the SWANsat System
vendor (IOSTAR Corporation). All trademarks, product images, and company logos depicted
herein remain the property of their respective owners.
Sales Account Territory Contact:
West Coast Contact:
Charles R. Welty
Chief Executive Officer
William P. Welty
Chief Executive Officer
Leading Edge Technologies, LLC
215 E. Orangethorpe Ave. #300
USA Telephone: 714-738-9951
SWANsat Marketing, LLC
215 E. Orangethorpe Ave. #300
USA Toll Free: 1-888-SWANSAT
USA Telephone: 714-738-1938
Email: [email protected]
Internet: http://swansat.com
Email: [email protected]
Internet: http://swansat.com
THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE
“ACT”). IN PARTICULAR, WHEN USED IN THE DOCUMENT, THE WORDS “PLANS,”
“CONFIDENT THAT,” “BELIEVES,” “EXPECTS,” “INTENDS TO,” “WILL,” AND SIMILAR
CONDITIONAL EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE ACT AND ARE SUBJECT TO THE SAFE
HARBOR CREATED BY THE ACT. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS
AND UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS. SUCH RISKS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, MARKET CONDITIONS,
COMPETITIVE RISKS, THE ABILITY TO SUCCESSFULLY COMPLETE ADDITIONAL
FINANCINGS, AND OTHER RISKS.
C O N F I D E N T I A L A N D P R O P R I E T A R Y T O S W A N S A T M A R K E T I N G . N O T F O R D U P L I CA T I O N .
T ABLE
OF
C ONTENTS
MARKETING PLAN......................................................................................................................................... I
OVERVIEW OF MARKETING PLAN...........................................................................................................1
EXECUTIVE SUMMARY: A TERRITORIAL APPROACH TO SALES MANAGEMENT ............................................ 1
SWANsat Marketing—Exclusive Marketing Partner for SWANsat............................................................. 2
Structure of the SWANsat Partnerships ...................................................................................................... 2
About the SWANsat Subscriber Account Territories................................................................................... 4
SWANsat Subscriber Account Territories and Top Level Domains............................................................ 5
Welcome to a Better Way to Communicate ................................................................................................. 9
A World-Wide Impact on Telecommunications........................................................................................... 9
Imagine the Possibilities.............................................................................................................................. 9
Not Necessarily a Replacement for Current Services ............................................................................... 11
Basic Satellite Radio Available ................................................................................................................. 11
How much will SWANsat cost? ................................................................................................................. 11
How is SWANsat possible?........................................................................................................................ 11
The SWANsat Subscriber Newsletter ........................................................................................................ 12
Signing Up ................................................................................................................................................. 13
MARKETING PLAN
PAGE 1
O VERVIEW OF
M ARKETING P LAN
2
.
SWANSAT® — THE SUPER-WIDE AREA NETWORK®
EXECUTIVE SUMMARY: A TERRITORIAL APPROACH TO SALES MANAGEMENT
T
he advent of digital CODECing technologies and ubiquitous acceptance of the Internet have
gradually but inevitably melded together the broadcast, computer networking, and telecommunications industries so thoroughly and completely through the common medium of
digital transmission protocols that the boundaries that once separated these disciplines are being
erased. Digitalization of transmission technologies characterizes the Direct Broadcast Service, the
Internet, Internet2, fiber optic technologies supported by cable modems, 2.5G, 3G, emerging 4G
(IMT-2000+) wireless protocols, and other technological innovations too numerous to mention.
Terrestrially-based cable companies have added telephone services and high speed Internet services to their roster of service
offerings. Further, convergent technologies continue to merge
computer, telephone, and television hardware, and emerging
technologies like LMDS continue to blur and, in some cases
remove, the boundaries between traditional communications
industries and broadband protocols, such as high-definition television and high-speed Internet services.
Anticipating the logical direction in which all of these
protocols are inexorably heading, Leading Edge Technologies,
Ltd. (“LET”), a privately-held Nevada limited liability corporation,
has developed the Super-Wide Area Network™ (the “SWANsat
System”), an innovative constellation of three high-powered
geosynchronous telecommunications satellites that will provide
exponentially better telecommunications system capability
worldwide than any currently-existing system. LET, in turn, has
licensed SWANsat Holdings, LLC, to operate the SWANsat
System and manage the Subscriber Accounts. SWANsat Holdings
has licensed the exclusive worldwide territorial marketing rights
in the SWANsat System exclusively to SWANsat Marketing (the
“SAT Licensor”).
Candidate for SWANsat Concept
Handset — The Origami
This design was not developed by
SWANsat Marketing or LET.
Using the SWANsat System, all of the information access bandwidth needs of a SWANsat subscriber will be seamlessly integrated into a single system, including:
Ø Telephone and fax services (with no tariffs whatsoever for local, domestic long-distance, or
international long-distance calls)
Ø VoIP-based audio teleconferencing (with a virtually unlimited number of parties)
Ø Video conferencing services (full-motion, 30 frames FPS at up to 200kbs)
Ø Super-high speed Internet access (greater than 1Megabit/second access speeds)
PAGE 2
MARKETING PLAN
Ø Email with integrated free user web pages for individuals
Ø Hundreds of educational and entertainment Direct Broadcast Service channels
Ø DVD-quality video
Ø CD-quality audio (commercially-sponsored and non-commercial)
When fully deployed and operational, SWANsat will become the subscriber’s single information
services wireless provider: Instead of receiving a series of monthly bills totaling more than
USD$2251 for all of the services listed above, the subscriber will only pay about 50% of that amount
(perhaps as much as USD$100-USD$150 per month). SWANsat Marketing, through its proposed
Subscriber Account Territory Partners world wide, seeks to enter the domestic and international
telecommunications markets for provision of all of the above services through one ubiquitous,
seamless worldwide broadband network—hence the system designator Super-Wide Area Network.
SWANsat Marketing—Exclusive Marketing Partner for SWANsat
SWANsat Marketing, a privately-held Nevada limited liability company, has divided the globe
into eight Subscriber Account Territories (individually, “SAT” and collectively, “SATs”). The countries assigned to each SAT are set forth in the table in “SWANsat Subscriber Account Territories and
Top Level Domains“ on page 5, below. Each limited partnership is formed to manage the SWANsat
Services in the Subscriber Account Territory as set forth in the table, and are designated and specifically limited to the areas set forth in the table. The long range goal of
SWANsat Marketing is to ensure market acceptance of LET’s proprietary technology and the SWANsat System concept. SWANsat
Marketing‘s mid-range objectives are to demonstrate that the SWANsat
System concept can work and to increase public, governmental, and
industry awareness of LET’s technology.
Structure of the SWANsat Partnerships
LET has been granted authorization to launch and operate a constellation of satellites that will
operate in the 92-95GHz and 102-105 GHz electromagnetic frequency bands, which are defined as
Band 11 of the Extremely High Frequency (EHF) 30-300GHz band described in §2.101 Nomenclature
of Frequencies contained in Subpart B: Allocation, Assignment, and Use of Radio Frequencies set forth in
the Rules of the Federal Communications Commission of the United States of America. The host
country granting the permit and licenses is not the United States of America. As of the date of
this document, the licensing country is the Republic of Nauru, an independent island nation in
Oceania (hereafter, the “Host Country”). The Host Country is a member of the United Nations and
a member of the International Telecommunication Union treaty.
1
If basic residential telephone service costs about USD$30 per month, with a second dedicated fax line costing about
USD$15 per month, cellular service costing about USD$50 per month (long distance charges included), high speed DSL
Internet access costing USD$50 per month, and reception of about 100 cable or DBS satellite channels costing about
USD$70 per month, and if satellite-delivered digital audio service costs about USD$10 per month, the end user’s total
monthly information and communications utility bill therefore runs no less than about USD$225 per month. SWANsat
will cost about US$100 per month, or perhaps as much as USD$150 per month.
MARKETING PLAN
PAGE
3
LET has entered into a contractual relationship with SWANsat Marketing by which SWANsat
Marketing owns and controls, for 25 years (and renewable in 25-year terms thereafter) the exclusive
world-wide right to market commercial and non-commercial Subscriber accounts to individuals,
corporations, and/or governments throughout the world. SWANsat Marketing is not expected to license individual Subscribers, but will instead authorize Subscriber Area Territories in specific geographic areas around the globe. The Master License Contract between LET and SWANsat Marketing enables SWANsat Marketing to own subsidiary companies for the purpose of establishing one
or more Subscriber Area Territories. Eight SATs have been delineated as set forth below.
SAT
CODE
1
2
3
4
5
6
7
8
Subscriber Account Territory (SAT)
Name
North America
UK & Europe
Africa
India
Middle East
China
Country
Count
5
52
48
42
59
2
24
3
Population Now
(2003)
322,677,510
554,998,441
574,412,736
1,443,644,392
857,341,840
1,049,700,118
182,739,018
1,316,972,638
Population at
Launch (2008)
337,633,815
589,768,747
576,592,782
1,532,366,791
944,990,259
1,125,368,288
203,478,323
1,356,845,573
PAGE 4
MARKETING PLAN
About the SWANsat Subscriber Account Territories
SWANsat Marketing will establish eight separate management corporations to serve as General Partners to individual Subscriber Account Territory Limited Partnerships. The duly authorized
General Partners are wholly-owned or partly-owned subsidiary companies of SWANsat Holdings,
LLC, and include: SWANsat 1, Inc. (licensed to manage Subscriber Accounts in North America);
SWANsat 2, Inc. (licensed to manage Subscriber Accounts in Central and South America and the
Caribbean); SWANsat 3, Inc. (licensed to manage Subscriber Accounts in the UK and Europe);
SWANsat 4, Inc. (licensed to manage Subscriber Accounts in Asia, Australia & New Zealand, and
in Oceania), SWANsat 5, Inc. (licensed to manage Subscriber Accounts in Africa); SWANsat 6, Inc.
(licensed to manage Subscriber Accounts in India); SWANsat 7, Inc. (licensed to manage Subscriber
Accounts in the Middle East); and SWANsat 8, Inc. (licensed to manage Subscriber Accounts in
China). Each of these corporations are licensed to form Limited Partnerships to serve the Territory
assigned to it.
There are at present ten Limited Partnerships in organization that will be licensed to manage
individual Subscriber Accounts in the eight SATs: SWANsat Territory 1A, Ltd. and SWANsat Territory 1B, Ltd.; SWANsat Territory 2, Ltd.; SWANsat Territory 3A, Ltd. and SWANsat Territory 3B,
Ltd.; SWANsat 4, Ltd.; SWANsat 5, Ltd.; SWANsat Territory 6, Ltd.; SWANsat Territory 7, Ltd.; and
SWANsat Territory 8, Ltd. Each Limited Partnership is licensed to manage 1,000,000 Subscriber Accounts.
MARKETING PLAN
PAGE
5
SWANsat Subscriber Account Territories and Top Level Domains
SAT
Code
100
101
102
103
104
105
NAT
Code
1
1
1
299
508
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
1
1
1
1
54
247
1
1
501
591
672
55
1
56
57
506
53
1
1
593
520
500
594
1
590
502
592
509
504
1
596
52
1
599
505
507
595
51
1
290
1
1
1
1
597
1
1
598
58
1
1
300
301
302
303
355
213
376
Country
North America
America (USA)
Bermuda
Canada
Greenland
Saint Pierre and Miquelon
Total Population Estimates:
Anguilla
Antarctica
Antigua and Barbuda
Argentina
Aruba
Ascension Island
Bahamas
Barbados
Belize
Bolivia
Bouvet Island
Brazil
Cayman Islands
Chile
Colombia
Costa Rica
Cuba
Dominica
Dominican Republic
Ecuador
El Salvador
Falkland Islands (Malvina)
French Guiana
Grenada
Guadeloupe
Guatemala
Guyana
Haiti
Honduras
Jamaica
Martinique
Mexico
Montserrat
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
Saint Helena
Saint Lucia
Saint Vincent and the Grenadines
S. Georgia & S. Sandwich Islands
Suriname
Trinidad and Tobago
Turks and Caicos Islands
Uruguay
Venezuela
Virgin Island (British)
Virgin Islands (American)
UK & Europe
Albania
Andorra
Austria
TLD
Map Coordinates
Longitude Latitude
Pop in 2003
Est Pop in 2008
.us
.bm
.ca
.gl
.pm
38
32
60
72
46
00
20
00
00
50
N
N
N
N
N
97
64
95
40
56
00
45
00
00
20
W
W
W
W
W
290,342,554
64,482
32,207,113
56,385
6,976
322,677,510
303,824,646
66,536
33,679,263
56,326
7,044
337,633,815
.ai
.aq
.ag
.ar
.aw
.ac
.bs
.bb
.bz
.bo
.bv
.br
.ky
.cl
.co
.cr
.cu
.dm
.do
.ec
.sv
.fk
.gf
.gd
.gp
.gt
.gy
.ht
.hn
.jm
.mq
.mx
.ms
.an
.ni
.pa
.py
.pe
.pr
.sh
.kn
.lc
.vc
.gs
.sr
.tt
.tc
.uy
.ve
.vg
.vi
18
90
17
34
12
7
24
13
17
17
54
10
19
30
4
10
21
15
19
2
13
51
4
12
16
15
5
19
15
18
14
23
16
12
13
9
23
10
18
15
17
13
13
51
4
11
21
33
8
18
18
15
00
03
00
30
95
15
10
15
00
26
00
30
00
00
00
30
25
00
00
50
45
00
07
15
30
00
00
00
15
40
00
45
15
00
00
00
00
15
56
20
53
15
45
00
00
45
00
00
20
20
N
S
N
S
N
S
N
N
N
S
S
S
N
S
N
N
N
N
N
S
N
S
N
N
N
N
N
N
N
N
N
N
N
N
N
N
S
S
N
S
N
N
N
S
N
N
N
S
N
N
N
63
0
61
64
69
14
76
59
88
65
3
55
80
71
72
84
80
61
70
77
88
59
53
61
61
90
59
72
86
77
61
102
62
68
85
80
58
76
66
5
62
60
61
59
56
61
71
56
66
64
64
10
00
48
00
58
37
00
32
45
00
24
00
30
00
00
00
00
20
40
30
55
00
00
40
35
15
00
25
30
30
00
00
12
45
00
00
00
00
30
42
45
68
12
00
00
00
35
00
00
50
50
W
E
W
W
W
W
W
W
W
W
E
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
12,738
50
67,897
38,740,807
70,844
1,250
297,477
277,264
266,440
8,586,443
0
182,032,604
41,934
15,665,216
41,662,073
3,896,092
11,268,976
69,655
8,715,602
13,710,234
6,470,379
2,967
186,917
89,258
440,189
13,909,384
702,100
7,527,817
6,669,789
2,695,867
425,966
103,718,062
8,995
216,226
5,128,517
2,960,784
6,036,900
28,409,897
3,878,679
7,367
38,763
162,157
116,812
0
435,449
1,104,209
19,350
3,413,329
24,654,694
124,778
108,814
545,048,011
13,854
50
69,842
40,677,348
72,480
1,250
307,451
281,859
299,107
9,247,816
0
191,908,598
47,762
16,438,102
44,858,264
4,191,948
11,449,006
69,080
9,294,208
15,006,473
7,057,131
3,000
206,941
90,303
460,486
15,802,999
725,215
8,230,617
7,413,097
2,798,060
442,119
109,955,400
9,638
225,168
5,639,057
3,150,218
6,829,969
30,618,697
3,969,048
7,581
39,619
172,884
118,432
0
440,486
1,062,529
22,336
3,547,346
26,437,044
124,510
108,210
579,942,638
.al
.ad
.at
41 00 N 20 00 E
42 30 N
1 30 E
47 20 N 13 20 E
3,526,642
69,150
8,162,656
3,619,778
72,413
8,205,533
PAGE 6
MARKETING PLAN
SAT
Code
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
NAT
Code
375
32
387
359
385
420
45
372
298
358
33
49
350
30
44
36
354
353
44
39
44
371
423
370
352
389
356
373
377
31
47
48
351
40
378
381
421
386
34
47
46
41
380
44
39
400
401
402
403
404
405
406
407
408
409
410
411
412
413
414
415
416
417
418
419
420
684
61
880
975
673
855
61
61
682
670
679
689
671
62
81
7
686
850
82
856
Country
TLD
Belarus
Belgium
Bulgaria
Croatia/Hrvatska
Czech Republic
Denmark
Estonia
Faroe Islands
Finland
France
Germany
Gibraltar
Greece
Guernsey
Hungary
Iceland
Ireland
Isle of Man
Italy
Jersey
Latvia
Liechtenstein
Lithuania
Luxembourg
Macedonia
Malta
Moldova
Monaco
Netherlands
Norway
Poland
Portugal
Romania
San Marino
Serbia and Montenegro (Yugoslavia)
Slovak Republic
Slovenia
Spain
Svalbard
Sweden
Switzerland
Ukraine
United Kingdom
Vatican (Holy See)
American Samoa
Australia
Bangladesh
Bhutan
Brunei Darussalam
Cambodia
Christmas Island
Cocos (Keeling Islands)
Cook Islands
East Timor
Fiji
French Polynesia
Guam
Indonesia
Japan
Kazakhstan
Kiribati
Korea North
Korea South
Laos
.by
.be
.ba
.bg
.hr
.cz
.dk
.ee
.fo
.fi
.fr
.de
.gi
.gr
.gg
.hu
.is
.ie
.im
.it
.je
.lv
.li
.lt
.lu
.mk
.mt
.md
.mc
.nl
.no
.pl
.pt
.ro
.sm
.yu
.sk
.si
.es
.sj
.se
.ch
.ua
.uk
.va
.as
.au
.bd
.bt
.bn
.kh
.cx
.cc
.ck
.tp
.fj
.pf
.gu
.id
.jp
.kz
.ki
.kp
.kr
.la
Map Coordinates
Longitude Latitude
53 00 N 28 00 E
50 50 N
4 00 E
44 00 N 18 00 E
43 00 N 25 00 E
45 10 N 15 30 E
49 45 N 15 30 E
56 00 N 10 00 E
59 00 N 26 00 E
62 00 N
7 00 W
64 00 N 26 00 E
46 00 N
2 00 E
51 00 N
9 00 E
36 8 N
5 21 W
39 00 N 22 00 E
49 28 N
2 35 W
47 00 N 20 00 E
65 00 N 18 00 W
53 00 N
8 00 W
54 15 N
4 30 W
42 50 N 12 50 E
49 15 N
2 10 W
57 00 N 25 00 E
47 16 N
9 32 E
56 00 N 24 00 E
49 45 N
6 10 E
41 50 N 22 00 E
35 50 N 14 35 E
47 00 N 29 00 E
43 44 N
7 24 E
52 30 N
5 45 E
62 00 N 10 00 E
52 00 N 20 00 E
39 30 N
8 00 W
46 00 N 25 00 E
43 46 N 12 25 E
44 00 N 21 00 E
48 40 N 19 30 E
46 07 N 14 49 E
40 00 N
4 00 W
78 00 N 20 00 E
62 00 N 15 00 E
47 00 N
8 00 E
49 00 N 32 00 E
54 00 N
2 00 W
41 54 N 12 27 E
14
27
24
27
4
13
10
12
21
8
18
15
13
5
36
48
1
40
37
18
20
00
00
30
30
00
30
30
14
50
00
00
28
00
00
00
25
00
00
00
S
S
N
N
N
N
S
S
S
S
S
S
N
S
N
N
N
N
N
N
170
133
90
90
114
105
105
96
159
125
175
140
144
120
138
68
173
127
127
105
00
00
00
30
40
00
40
50
46
55
00
00
47
00
00
00
00
00
30
00
W
E
E
E
E
E
E
E
W
E
E
W
E
E
E
E
E
E
E
E
Pop in 2003
Est Pop in 2008
10,322,151
10,330,824
3,989,018
7,588,399
4,422,248
10,251,087
5,394,138
1,408,556
46,345
5,204,405
60,180,529
82,398,326
27,776
10,625,945
64,818
10,057,745
280,798
3,924,023
74,261
57,998,353
90,156
2,348,784
33,145
3,592,561
456,764
2,063,122
400,420
4,439,502
32,130
16,223,248
4,555,400
38,622,660
10,102,022
22,380,273
28,119
10,655,774
5,416,406
1,935,677
40,217,413
2,811
8,970,306
7,408,319
48,055,439
60,094,648
911
584,474,203
10,287,955
10,403,951
4,074,523
7,262,675
4,485,046
10,220,911
5,484,723
1,380,099
47,770
5,244,749
61,279,972
82,369,548
28,002
10,722,816
65,726
9,930,915
286,961
4,156,119
76,220
58,145,321
91,533
2,275,236
34,498
3,563,834
486,006
2,101,268
414,792
4,496,774
32,796
16,645,313
4,644,457
38,671,560
10,171,079
22,246,862
29,973
10,673,520
5,455,407
1,945,522
40,491,051
2,790
9,045,389
7,581,520
46,629,669
60,943,912
911
586,527,398
57,844
19,731,984
138,448,210
2,139,549
358,098
13,124,764
433
630
21,008
997,853
868,531
262,125
163,593
234,893,453
127,214,499
16,763,795
98,549
22,466,481
48,289,037
5,921,545
57,496
20,600,856
153,546,901
2,376,680
393,551
14,370,513
409
612
21,923
1,107,432
931,545
282,645
175,877
252,259,409
127,425,722
17,068,212
110,252
23,479,089
49,712,837
6,677,534
MARKETING PLAN
SAT
Code
421
422
423
424
425
426
427
428
429
430
431
432
433
434
435
436
437
438
439
440
441
442
443
444
445
446
447
448
449
450
451
452
NAT
Code
853
60
960
692
691
976
95
674
977
687
64
683
672
670
92
680
675
63
44
7
65
677
94
66
690
676
688
1
678
84
681
685
500
501
502
503
504
505
506
507
508
509
510
511
512
513
514
515
516
517
518
519
520
521
522
523
524
525
526
527
528
529
530
531
532
533
213
244
229
267
226
257
237
238
236
235
269
243
242
225
253
20
240
291
251
33
241
220
233
224
245
61
254
266
231
218
261
265
223
PAGE
Country
TLD
Macau
Malaysia
Maldives
Marshall Islands
Micronesia
Mongolia
Myanmar (Burma)
Nauru
Nepal
New Caledonia
New Zealand
Niue
Norfolk Island
Pakistan
Palau
Papua New Guinea
Philippines
Pitcairn Islands
Russian Federation
Singapore
Solomon Islands
Sri Lanka
Thailand
Tokelau
Tonga
Tuvalu
U.S. Minor Outlying Islands
Vanuatu
Vietnam
Wallis and Futuna Islands
Western Samoa
Africa
Algeria
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Chad
Comoros
Congo (Democratic Republic of)
Congo (Republic of)
Cote d'Ivoire
Djibouti
Egypt
Equatorial Guinea
Eritrea
Ethiopia
French Southern and Antarctic Ter.
Gabon
Gambia
Ghana
Guinea
Guinea-Bissau
Heard and McDonald Islands
Kenya
Lesotho
Liberia
Libya
Madagascar
Malawi
Mali
.mo
.my
.mv
.mh
.fm
.mn
.mm
.nr
.np
.nc
.nz
.nu
.nf
.mp
.pk
.pw
.pg
.ph
.pn
.ru
.sg
.sb
.lk
.th
.tk
.to
.tv
.um
.vu
.vn
.wf
.ws
.dz
.ao
.bj
.bw
.bf
.bi
.cm
.cv
.cf
.td
.km
.cg
.cd
.ci
.dj
.eg
.gq
.er
.et
.tf
.ga
.gm
.gh
.gn
.gw
.hm
.ke
.ls
.lr
.ly
.mg
.mw
.ml
Map Coordinates
Longitude Latitude
22 10 N 113 33 E
2 30 N 112 30 E
3 15 N 73 00 E
9 00 N 168 00 E
6 55 N 158 15 E
46 00 N 105 00 E
22 00 N 98 00 E
0 32 S 166 55 E
28 00 N 84 00 E
21 30 S 165 30 E
41 00 S 174 00 E
19 02 S 169 52 W
29 02 S 167 57 E
15 12 N 145 45 E
30 00 N 70 00 E
7 30 N 134 30 E
6 00 S 147 00 E
13 00 N 122 00 E
25 04 S 130 06 W
60 00 N 100 00 E
1 22 N 103 48 E
8 00 S 159 00 E
7 00 N 81 00 E
15 00 N 100 00 E
9 00 S 172 00 W
20 00 S 175 00 W
8 00 S 178 00 E
0 32 S 166 55 E
16 00 S 167 00 E
16 00 N 106 00 E
13 18 S 176 12 W
13 35 S 172 20 W
28
12
9
22
13
3
6
16
7
15
12
1
0
8
11
27
2
15
8
43
1
13
8
11
12
53
1
29
6
25
20
13
17
00
30
30
00
00
30
00
00
00
00
10
00
00
00
30
00
00
00
00
00
00
28
00
00
00
06
00
30
30
00
00
30
00
N
S
N
S
N
S
N
N
N
N
S
S
N
N
N
N
N
N
N
S
S
N
N
N
N
S
N
S
N
N
S
S
N
3
18
2
24
2
30
12
24
21
19
44
15
25
5
43
30
10
39
38
67
11
16
2
10
15
72
38
28
9
17
47
34
4
00
30
15
00
00
00
00
00
00
00
15
00
00
00
00
00
00
00
00
00
45
34
00
00
00
31
00
30
30
00
00
00
00
E
E
E
E
W
E
E
W
E
E
E
E
E
W
E
E
E
E
E
E
E
W
W
W
W
E
E
E
W
E
E
E
W
Pop in 2003
7
Est Pop in 2008
441,487
23,092,940
329,684
56,429
108,143
2,712,315
42,510,537
12,570
26,469,569
210,798
3,951,307
2,145
1,853
76,129
150,694,740
19,717
5,295,816
84,619,974
47
144,526,278
4,608,595
509,190
19,742,439
64,265,276
1,418
108,141
11,305
1,000
199,414
81,624,716
15,734
178,173
1,288,219,860
460,823
25,259,428
379,174
63,139
107,673
2,916,865
43,420,302
13,770
29,519,114
224,585
4,154,311
2,138
1,848
86,616
165,554,764
21,093
5,921,144
92,681,453
41
142,825,040
5,432,809
581,208
20,532,150
67,070,696
1,402
118,993
12,181
1,000
215,053
87,036,308
16,448
176,418
1,365,407,482
32,818,500
10,766,471
7,041,490
1,573,267
13,228,460
6,096,156
15,746,179
412,137
3,683,538
9,253,493
632,948
2,954,258
56,625,039
16,962,491
457,130
74,718,797
510,473
4,362,254
66,557,553
0
1,321,560
1,501,050
20,467,747
9,030,220
1,360,827
0
31,639,091
1,861,959
3,317,176
5,499,074
16,979,744
11,651,239
11,626,219
35,508,090
11,828,736
8,090,245
1,476,653
15,005,565
6,890,232
17,322,189
426,113
3,966,890
10,705,847
731,281
3,148,474
65,647,444
18,779,999
506,221
81,635,832
575,827
4,903,499
72,756,929
0
1,492,588
1,735,708
21,781,326
10,240,047
1,505,287
0
33,232,555
1,867,178
3,755,746
6,173,579
19,757,525
12,912,080
13,315,573
PAGE 8
MARKETING PLAN
SAT
Code
534
535
536
537
538
539
540
541
542
543
544
545
546
547
548
549
550
551
552
553
554
555
556
557
558
NAT
Code
222
230
269
212
258
264
227
234
262
250
239
221
248
232
252
27
249
268
255
228
216
256
212
260
263
600
601
602
91
44
700
701
702
703
704
705
706
707
708
709
710
711
712
713
714
715
716
717
718
719
720
721
722
723
724
93
374
994
973
357
995
98
964
972
962
965
996
961
968
970
974
966
963
992
90
993
971
998
967
800
801
802
803
86
852
886
Country
Mauritania
Mauritius
Mayotte
Morocco
Mozambique
Namibia
Niger
Nigeria
Reunion Island
Rwanda
Senegal
Seychelles
Sierra Leone
Somalia
South Africa
Sudan
Swaziland
Tanzania
Togo
Tunisia
Uganda
Western Sahara
Zambia
Zimbabwe
India
India
Indian Ocean Territory of Britain
Middle East
Afghanistan
Armenia
Azerbaijan
Bahrain
Cyprus
Georgia
Iran
Iraq
Israel
Jordan
Kuwait
Kyrgyzstan
Lebanon
Oman
Palestinian Territories
Qatar
Saudi Arabia
Syrian Arab Republic
Tajikistan
Turkey
Turkmenistan
Uzbekistan
Yemen
China
China
Hong Kong S.A.R.
Taiwan
.mr
.mu
.yt
.ma
.mz
.na
.ne
.ng
.re
.rw
.st
.sn
.sc
.si
.so
.za
.sd
.sz
.tz
.tg
.tn
.ug
.eh
.zm
.zw
Map Coordinates
Longitude Latitude
20 00 N 12 00 W
20 17 S 57 33 E
12 50 S 45 10 E
32 00 N
5 00 W
18 15 S 35 00 E
22 00 S 17 00 E
16 00 N
8 00 E
10 00 N
8 00 E
21 06 S 55 36 E
2 00 S 30 00 E
1 00 N
7 00 E
14 00 N 14 00 W
4 35 S 55 40 E
8 30 N 11 30 W
10 00 N 49 00 E
29 00 S 24 00 E
15 00 N 30 00 E
26 30 S 31 30 E
6 00 S 35 00 E
8 00 N
1 10 E
34 00 N
9 00 E
1 00 N 32 00 E
24 30 N 13 00 W
15 00 S 30 00 E
20 00 S 30 00 E
.in
.io
20 00 N 77 00 E
20 00 S 80 00 E
.af
.am
.az
.bh
.cy
.ge
.ir
.iq
.il
.jo
.kw
.kg
.lb
.om
.ps
.qa
.sa
.sy
.tj
.tr
.tm
.ae
.uz
.ye
33
40
40
26
35
42
32
33
31
31
29
41
33
21
32
25
25
35
39
39
40
24
41
15
.cn
.hk
.tw
TLD
Pop in 2003
Est Pop in 2008
2,912,584
1,210,447
178,437
31,689,265
18,567,855
1,927,447
11,058,590
133,881,703
755,171
7,810,056
175,883
10,580,307
80,469
5,732,681
8,025,190
42,768,678
38,114,160
1,161,219
35,922,454
5,429,299
9,924,742
25,632,794
261,794
10,307,333
12,576,742
857,341,840
3,364,940
1,260,781
216,334
34,272,968
19,517,722
2,020,790
12,594,396
150,456,422
808,506
8,534,202
205,901
11,963,359
82,247
6,419,348
9,379,907
41,583,442
43,354,411
1,175,886
39,651,247
6,037,624
10,451,738
29,745,337
289,755
11,036,192
12,891,546
944,990,259
1,049,700,118
0
1,049,700,118
1,125,368,288
0
1,125,368,288
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
28,717,213
3,326,448
7,830,764
667,238
771,657
4,934,413
68,278,826
24,683,313
6,116,533
5,460,265
2,183,161
4,892,808
3,727,703
2,807,125
2,237,194
817,052
24,293,844
17,585,540
6,863,752
68,109,469
4,775,544
2,484,818
25,981,647
19,349,881
336,896,208
32,385,402
3,344,694
8,079,043
718,306
792,604
4,835,250
72,061,076
28,221,181
6,500,389
6,198,677
2,596,799
5,275,652
3,967,467
3,309,440
2,611,904
928,635
28,610,332
19,747,586
7,653,394
71,892,807
5,232,077
2,682,747
28,268,440
22,993,911
368,907,813
35 00 N 105 00 E
22 15 N 114 10 E
23 30 N 121 00 E
1,286,975,468
7,394,170
22,603,000
1,316,972,638
1,325,716,960
7,820,243
23,308,370
1,356,845,573
00
00
30
00
00
00
00
00
30
00
30
00
50
00
00
30
00
00
00
00
00
00
00
00
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
65
45
47
50
33
43
53
44
34
36
45
75
35
57
35
51
45
38
71
35
60
54
64
48
00
00
30
33
00
30
00
00
45
00
45
00
50
00
15
15
00
00
00
00
00
00
00
00
MARKETING PLAN
PAGE
9
FEATURES AND BENEFITS
Welcome to a Better Way to Communicate
S
ooner or later it was bound to happen. Skyrocketing convergent technologies have finally led
to a seamless integration of information accessibility. It’s on the horizon. It’s coming soon. A
single, coherent, world-wide Super-Wide Area Network™ is on its way! So welcome to
SWANsat™—the future of networking and information interchange!
A World-Wide Impact on Telecommunications
SWANsat means seamless integration of all the subscriber’s information access needs.
SWANsat brings ubiquitous, point-to-point convergence of video, data, fax, voice, spamless email,
computer networking, Internet, intranets, entertainment video, and entertainment audio. Here is
what SWANsat’s unique onboard digital switching system linked to its 500,000-watt transmitter will
accomplish:
Ø No dependence on terrestrial television
Ø No dependence on terrestrial cable service
Ø No dependence on terrestrial movie rental services
Ø No dependence on terrestrial radio stations
Ø No dependence on terrestrial music distribution services
Ø No dependence on terrestrial telephone providers
Ø No dependence on terrestrial cellular phone service providers
Ø No dependence on
terrestrial long distance
carriers
Ø No dependence on
terrestrial
Internet
providers
Ø No dependence on
public
switched
networks
Imagine the Possibilities...
Sometime in mid-2008, or
maybe sooner, a whole new
kind of telecommunication
technology will come on line.
It’s called SWANsat™ and the
system has been designed from
the ground up to operate on a
business basis that’s totally
unrelated
to
traditional
broadcast or common carrier
models. How?
Through the SWANsat handset and its USB and firewire ports, in/out
audio & video connections with built-in 30 fps video camera, Bluetooth™
wireless headset, and built-in FM transmitter, SWANsat subscribers will
have unparalleled connectivity everywhere on the planet.
PAGE 10
MARKETING PLAN
Ø SWANsat is not a traditional telephone company common carrier.
Ø SWANsat is not based on a traditional television or radio broadcasting model.
Ø No, SWANsat is based-from its very foundations-on a computer networking model.
The SWANsat handset is not a telephone. It’s more than a cell phone-enabled Pocket PC or
PDA. Each SWANsat handset is actually a Portable Internet Terminal with its own unique IP address on the SWANsat System. The SWANsat handset and the SWANsat System are unlike anything anyone has ever seen, or perhaps even dreamed of.
As a Super-Wide Area Network, SWANsat is building an innovative constellation of three
high-powered geosynchronous telecommunications satellites that will provide telecommunications
service capability worldwide at a quality and intensity exponentially better than any other currently-existing system. SWANsat will seamlessly integrate all of the subscriber’s information access
bandwidth needs into a single system.
Here’s a partial list of technologies that will converge into one comprehensive omnisystem:
Ø Unlimited free two-way voice communication services, with no tariffs whatsoever for local,
domestic long-distance, or international long-distance calls
Ø Free world-wide fax services, also on a non-tariff basis
Ø Free audio teleconferencing services between an almost unlimited SWANsat subscriber
parties
Ø Free video teleconferencing services on a full-motion, 30 fps basis between an almost
unlimited number of SWANsat subscriber parties
Ø Free super-high speed internet access at greater than 1Megabit/second access speeds
Ø Free spamless email with up to five megabytes of attachments per piece of email
Ø Free integrated user web pages for individuals
Ø Free 20 megabytes of email and file server storage
Ø Free digital satellite video
Ø Hundreds of educational and entertainment Direct Broadcast Service channels, most free
Ø DVD-quality video downloads for purchase or rental
Ø Free CD-quality commercially sponsored audio
Ø Free GPS location capabilities
Ø World-wide emergency locator services with seamless interconnection to emergency rescue
location anywhere on the planet, except Antarctica and the North Pole.
Ø Transmission of SWANsat audio to any FM radio within 40 feet of the SWANsat handset so
the subscriber can listen through a car or home stereo system
Ø Bluetooth™ compatible wireless headset for hands-free listening
All of this will be available at less than half the cost of what the subscriber is probably already
paying for only a few of these services when purchased from separate providers.
MARKETING PLAN
PAGE
11
Not Necessarily a Replacement for Current Services
SWANsat is not necessarily a replacement for cellular service, cable TV or land-based broadband Internet connections, but it could easily replace them. We see SWANsat as a supplement to
terrestrial-based coverage. That’s because they don’t reach everywhere. Cell phones and cable lines
only reach so far, as everyone already knows. Ever lost a cell phone signal when traveling through
a tunnel or parking in the lower level of a parking garage? Ever lost a DBS satellite signal through
rain attenuation during a rain storm?
No problem with SWANsat! Its W-band signal, powered by a proprietary and patented
500,000-watt satellite transmitter, will pierce through the most violent storm, and is expected to deliver a clear signal to every square inch on the planet (except the north and south polar areas—
Santa Claus and the penguins are on their own).
Basic Satellite Radio Available
For purists who prefer not to hear commercials when listening to audio,
SWANsat will also offer commercial-free CD-quality satellite radio on a paid
subscription basis. But it won’t cost more than comparable satellitedelivered digital audio services. And it will probably cost less.
How much will SWANsat cost?
The right question to ask first is “How much is the subscriber paying now for the services that
SWANsat will provide?” Then ask, “How much will SWANsat save the subscriber?”
Basic Service
Residential phone service
Fax line
Cellular service
High speed DSL internet
Cable or DBS satellite channels
Satellite-delivered digital audio service
Total:
Basic Cost
$30
$15
$50
$50
$70
$10
$225
Here’s how we calculate the savings: If basic residential phone service costs about USD$30 per
month, and if a second dedicated fax line costs about USD$15 per month, and if a basic cellular
service costs about USD$50 per month (with long distance charges included), if a high speed DSL
internet access costs about USD$50 per month, and if the subscriber has 100 cable or DBS satellite
channels costing about USD$70 per month, and if the subscriber also has a satellite-delivered digital audio service costing about USD$10 per month, then the total information utility bill is currently
running no less than USD$225 per month. SWANsat will deliver all of these service for a monthly
fee perhaps as little as USD$100, but probably not more that USD$150.
How is SWANsat possible?
Simply put, SWANsat will accomplish this by adding about 12 million high-speed carpool
lanes to the Information Superhighway. When SWANsat begins broadcast operations in late 2007
or early-2008, we’ll bring state-of-the-art, leading edge technologies to bear in both space-based and
earth-based telecommunications, combining the best of mobile and fixed satellite services into a coherent communications system that meets the subscriber’s needs anywhere in the world.
PAGE 12
MARKETING PLAN
SWANsat will meet the growing demand for telecommunications services by offering a full
range of bandwidth-on-demand services. SWANsat seamlessly integrates a variety of two-way data
transmission and reception services. SWANsat’s sophisticated signal regeneration capability will
reprocess on board the SWANsat spacecraft the signals antecedent to their rebroadcast back to their
intended receptors.
More than 12,000,000 digital channels will be constantly available for use. Because of the high
frequency of the SWANsat transmission and reception bandwidths, SWANsat won’t be as susceptible to signal attenuation caused by atmospheric and meteorological disturbances as is the case with
other transmission systems that operate at lower electromagnetic frequencies.
The SWANsat Subscriber Newsletter
We are constrained under law from selling a service that is not operational at this time. We
can, however, offer the mail and web site features to customer now, and we can sell a subscription
to the SWANsat Subscriber newsletter to keep future customers informed of the progress of the construction and launch of SWANsat. We’ll credit the USD$20 annual fee for the SWANsat Subscriber
newsletter against the activation fee for the SWANsat account when the SWANsat System becomes
operational. All accounts will carry a USD$100 activation fee.
The $20 annual SWANsat Subscriber newsletter fee (paid when the customer subscribes, and
then annually in January of 2005, 2006, 2007, and 2008) will be credited toward the activation fee
when the SWANsat service begins. The subscription to the SWANsat Subscriber includes an introductory newsletter. We will send four additional quarterly updates to the subscriber by email.
If subscribers pay for all five years of the SWANsat Subscriber newsletter in advance, and if the
subscriber commits upon commencement of SWANsat System operations to enter into a 36-month
contract (to begin when the SWANsat System is launched and stabilized in orbit), we’ll waive the
activation fee and the fee for the first month of the customer’s SWANsat service. That’s at least a
USD$200 discount. And once a Subscriber Account Number is assigned to a customer, it remains
assigned for the life of the SWANsat System. When the subscriber dies, it is permanently deactivated and will never be used again.
The SWANsat subscriber receives:
Ø A reserved account number, personal and unique, and good for the subscriber’s lifetime.
The subscriber will never need another phone number or email account again.
Ø A private email account that is guaranteed to be spam proof. The email account will be
immediately available upon subscription to the SWANsat Subscriber newsletter and will include 20 megabytes of mess storage and will allow reception of attachments up to 5 megabytes in size. By contrast, hotmail.com costs about USD$4 per month for similar storage.
Ø A personal web page (up to 20 megs of basic storage). The personal URL will be based on
the SWANsat Subscriber Account Number and will be available immediately upon subscription to the SWANsat Subscriber newsletter.
Ø An introductory edition of the SWANsat Subscriber newsletter. This special edition describes the history of the SWANsat System and profiles the services and benefits of the
SWANsat System.
MARKETING PLAN
PAGE
13
Ø At least $100 per year in printed and on-line coupons good for free or discounted services
and goods from many popular favorite retailers.
Ø Four quarterly newsletters in HTML format (with links to PDF editions of the newsletters).
Each newsletter provides subscribers with an update on the current status of construction
of the SWANsat satellites and profiles the fascinating people behind what has been called
“the greatest advance in networking in the history of the planet.”
Ø $20 off the activation fee for each year that the subscriber has maintained a subscription to
the SWANsat Subscriber newsletter, up to $100 over five years. And newsletter subscribers
can earn up to three months of credits toward the SWANsat service when it is activated.
Discounts on SWANsat Services
If the subscriber pays all five years of the subscription to the SWANsat Subscriber in advance
(USD$100), when the SWANsat System is activated, we will waive the activation fees and we will
waive the subscriber’s first month’s service fee. If the subscriber also refers four friends to us, when
all four friends have paid for their five-year subscription to the SWANsat Subscriber newsletter, we
will credit an additional month of service to the referring subscriber’s account when the SWANsat
System is operational. If the subscriber signs up five individuals (including the subscriber) and then
pays for all of the five-year subscriptions to the SWANsat Subscriber newsletter in advance
(US$500), we’ll waive all five activation fees, and we’ll waive the first month’s monthly payment
for all five accounts when they are activated, and we’ll waive the Subscriber Account fees for the
months of the referring subscriber’s first and second anniversaries after SWANsat account is activated.
Signing Up
By subscribing to the SWANsat Subscriber newsletter at SWANsat’s Veri-Sign certified website
(http://swansat.com), customers will take their first step. Upon our receipt of a paid subscription to
receive our quarterly newsletter, a SWANsat account is set aside for the customer. All he or she has
to do is keep the email account information with us up to date, and maintain the annual subscription.
We’ll credit every dollar paid for the SWANsat Subscriber newsletter subscription to the initial
connection fee, and we’ll give the customer his/her first month’s service on SWANsat for free as a
special bonus if the customer purchases a five-year subscription in advance.

On Utilization of the W-Band High-Frequency

Transcription

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